Iran, US continue talks but major hurdles complicate a deal

Negotiations between Iran and the United States are making cautious progress, but the outcome remains highly uncertain as fundamental divisions persist and any overlap between the two sides’ red lines remains elusive.

The third round of talks took place in Muscat on Saturday, marking the first time that technical experts engaged directly.

Although the initiation of technical discussions is a positive development, addressing detailed issues exposed deep divisions, slowing the momentum. Statements by Oman’s Foreign Minister Badr al-Busaidi and Iran’s Foreign Minister Abbas Araghchi were notably cautious, signaling limited optimism.

Araghchi emphasized the substantial gap between the two sides' demands, noting that goodwill alone will not bridge it. Talks are scheduled to continue next week at both expert and chief negotiator levels.

Potential breakthrough?

Despite the uncertainties, a deal could be easier to forge compared to the one in 2015, for several reasons:

1. Regional dynamics have shifted, with Arab states now largely supporting an agreement.
2. Iran’s frozen assets are significantly lower—$10–20 billion today, compared to $80–150 billion in 2015.
3. Iran’s regional influence through proxy groups has weakened.
4. Domestic unrest has eroded the IRI’s internal position, increasing its incentive to negotiate.
5. The reduced intensity of US-Russia rivalry removes a complicating factor.
6. The US-China trade war may hamper Washington’s ability to apply maximum pressure.

Both Washington and Tehran prefer a diplomatic outcome over military confrontation. However, historical, political, and ideological differences complicate the path forward.

Core obstacles

First, the legacy of mistrust remains deep. Decades of conflict, sanctions, and failed diplomacy have hardened suspicions on both sides.

President Trump's withdrawal from the 2015 deal heightened Iranian concerns about American reliability. Meanwhile, US officials remain wary of Iran’s actions. Any agreement would require both sides to genuinely believe that commitments will be honored—an especially tall order given the political volatility in both countries.

Second, Tehran is unwilling to fully dismantle its nuclear infrastructure, resisting a repeat of Libya’s disarmament model. It may agree to reduce uranium enrichment and degrade highly enriched stockpiles but will preserve advanced centrifuge capabilities.

Iran’s regional influence, although waned, still concerns Washington, particularly with regard to Israel. Many in Benjamin Netanyahu's cabinet believe the current window offers a rare chance to cripple Iran’s nuclear capabilities and may push for covert or limited military operations to derail negotiations.

European powers are another factor. Britain, Germany, and France, alarmed by Iran’s growing military cooperation with Russia, are considering reimposing UN sanctions if no progress is made. Though not directly involved in current talks, their support will be critical to any final agreement.

Sanctions are another obstacle. While economic pressure has hurt Iran deeply, many sanctions, particularly those linked to terrorism, were codified by Congress and cannot be lifted by the administration alone. A complex framework for phased sanctions relief will be necessary.

Interim agreement?

In sum, while opportunities for a breakthrough exist, formidable challenges remain. Mistrust, nuclear safeguards, regional tensions, domestic politics, and sanctions enforcement all complicate diplomacy.

An interim agreement—laying the groundwork for a broader, binding deal—appears the most realistic short-term path.