Renewed Concerns over Iran's Nuclear Program and Resurging Middle East Security Risks: A Situational Analysis
Executive Summary
The full-scale Middle East war, triggered by a U.S.-Israeli airstrike in February 2026, transitioned into a phase of economic warfare led by the United States after failing to achieve regime change. However, following the expiration of the Islamabad Memorandum in August, Iran has shifted to an offensive posture, exercising control over passage through the Strait of Hormuz and issuing hardline foreign policy messages. Recent strikes on Larak Island and Iranian missile attacks on U.S. military facilities have revived concerns of a wider conflict. Amid these developments, calls within Iran to withdraw from the Non-Proliferation Treaty (NPT) and a growing distrust of the international inspections regime have emerged. The United States has reaffirmed that preventing Iran from acquiring nuclear weapons is its top priority and has officially ruled out the possibility of negotiations, heightening the structural risk of military escalation and nuclear proliferation becoming intertwined. With China accounting for the majority of Iran's crude oil imports, Washington's selective enforcement of sanctions can be interpreted as an attempt to contain broader conflict with Beijing, but it also exposes the limits of the sanctions' effectiveness. This is a critical time for South Korean companies and the government to prepare on multiple levels for the risks associated with passage through the Strait of Hormuz, oil supply chain instability, and the potential scenario of Iran restarting its nuclear program.
I. Situational Analysis of the Issue
Concerns over Iran's Renewed Pursuit of Nuclear Weapons and Middle East Security Risks: An Issue Analysis
1. Background and Developments
The current crisis began on February 28, 2026, when the United States and Israel launched airstrikes on targets within Iran, triggering a full-scale war in the Middle East [8][10]. Although Supreme Leader Khamenei was killed in an Israeli airstrike, the Iranian regime itself did not collapse [8]. After the six-month military campaign failed to achieve its goal of regime change, the United States shifted its strategy toward seeking an exit through economic warfare [8].
On June 17, President Trump and the Tehran government signed the 'Islamabad Memorandum,' which stipulated an immediate and permanent cessation of military actions on all fronts [5][6]. However, SIPRI points out that the wording of a key clause in the memorandum implies that the United States could permanently grant Iran the right to restrict passage through the Strait of Hormuz as part of a final peace treaty [3]. The memorandum expired on August 17, after which the United States and Iran resumed their factual disputes over the right of passage [2][10].
Immediately after the memorandum's expiration, Iran shifted from a defensive to an offensive posture. The Ministry of Foreign Affairs, the Supreme National Security Council, and the Islamic Revolutionary Guard Corps simultaneously issued hardline messages [8]. The Persian Gulf Strait Authority blacklisted 45 vessels, including a tanker owned by Sinokor Merchant Marine, marking the first instance demonstrating that Iran's unilateral passage control system has real enforcement power [12]. On August 24, the United States sanctioned over 60 entities under 'Operation Economic Outcast,' but opted for selective enforcement by excluding major Chinese banks, which account for over 80% of Iran's crude oil imports [10][12].
2. Current Situation
The Economic Times reports that the recent escalation was triggered by a U.S. strike on Iranian military assets on Larak Island and Iran's retaliatory missile attacks on facilities related to U.S. forces stationed in Jordan and the UAE [1]. This has revived concerns that the conflict, which had appeared to be shifting toward an economic and diplomatic phase, could slide back into direct confrontation [1]. The publication assesses that this has reignited a debate that had been on the periphery of public discourse in recent months: whether Washington might consider a nuclear option if it exhausts its conventional options [1].
Within Iran, calls to withdraw from the Nuclear Non-Proliferation Treaty (NPT) are resurfacing. According to DW, Iranian parliamentarian Ghasem Ravanbakhsh stated that a proposal to withdraw from the NPT has been submitted and is under review [4]. Ebrahim Rezaei, a member of the National Security and Foreign Policy Committee, remarked that withdrawal would be the "best response" to increased U.S. economic pressure [4]. Iran's top nuclear official has openly expressed distrust in the international inspections regime, going so far as to state that international organizations are mere "puppets" of the United States and Israel [17].
The U.S. side is officially ruling out any room for negotiations. White House spokesperson Karoline Leavitt stated that no end-of-war negotiations are currently underway with Iran, reaffirming that President Trump's top priority is "to ensure Iran never acquires a nuclear weapon" [9]. While Washington reiterates its position that all options are on the table, it appears to be emphasizing economic pressure [9].
The Iranian economy has entered a phase where the effects of this pressure are being felt. On August 19, Abdolnaser Hemmati, the governor of the Central Bank of Iran, made an unusually frank admission that U.S. measures have brought Iran's crude oil exports to a near standstill [11]. The Wall Street Journal reports that panic buying of fuel and food is spreading among the Iranian public, and that small-scale labor union protests, which had disappeared during the war, are re-emerging across the country [16]. Oil workers, pensioners, and teachers are holding rallies to protest the currency's depreciation and the rising cost of living [16].
At the same time, Iran's ability to physically blockade the Strait of Hormuz shows signs of weakening. Citing Goldman Sachs estimates, Gulf News reports that crude oil traffic in the Gulf region has recovered from a low of 5-6 million barrels per day in March to the current 15-16 million barrels per day, about two-thirds of the pre-war level [13]. This is seen as a result of the U.S. military clearing shipping lanes and protecting commercial vessels, leading to an assessment that the power of the 'Hormuz weapon' that Iran wielded for six months is diminishing [13]. Oil prices, which once neared $120 per barrel, have now fallen below $90 [7].
3. Key Actors and Positions
Iranian hardliners are presenting withdrawal from the NPT and a renewed nuclear push as a countermeasure to U.S. economic pressure [4]. The Islamic Revolutionary Guard Corps and the Supreme National Security Council have shifted from defensive rhetoric to offensive messaging, which can be read as an attempt to offset domestic pressure from economic sanctions with a hardline foreign policy stance [8]. However, as revealed by the statement from Central Bank Governor Hemmati, there are voices within the regime that do not deny the reality of the sharp decline in oil exports [11].
While the Trump administration has established preventing Iran's nuclear armament as an unchangeable goal, the actual center of gravity of its policy has shifted from regime change and dismantling nuclear facilities to stabilizing consumer oil prices and a strategy of economic strangulation [5][9]. The White House is sending a dual message, simultaneously emphasizing the absence of negotiations and the principle that 'all options are on the table' [9].
China, maintaining its status as the largest importer of Iranian crude oil, holds a de facto exceptional position regarding the enforcement of U.S. sanctions [10][12]. The selective enforcement approach, in which the U.S. excluded major Chinese banks from sanctions, supports the interpretation that Washington's economic war is less a full-scale campaign and more a politically calculated form of pressure [10].
Gulf oil-producing countries and other regional states like the UAE share an interest in preventing a wider war. The AP reports that regional countries are seeking an off-ramp from the Iran war, but also notes that additional tanker attacks have been reported in the Strait of Hormuz, showing that tensions have not been fully resolved [15]. Oman continues to serve as a mediation channel between the U.S. and Iran, and the survival of this channel is cited as a key indicator for future shifts in the situation [2][8].
4. Key Issues
First is the viability of Iran's 'nuclear card.' While the idea of withdrawing from the NPT has been raised at the parliamentary level, it is unclear whether this will lead to an actual policy decision or remain merely a pressure tactic for negotiations [4]. The Iranian nuclear chief's remarks expressing distrust of international organizations are working to narrow the scope for cooperation with the inspections regime [17].
Second is the question of whether the United States is running out of options. The 'nuclear option' debate, raised by the Economic Times, stems from the judgment that conventional military means have failed to subdue Iran [1]. However, the White House is maintaining its existing line of ruling out negotiations and continuing economic pressure, so it remains unconfirmed whether this debate will lead to an actual policy change [9].
Third is the legal and physical status of the Strait of Hormuz. SIPRI warns that the wording of the Islamabad Memorandum contains the potential to perpetuate Iran's right to restrict navigation [3]. On the other hand, on-the-ground shipping data shows that passage is largely normalizing due to the U.S. military's protection of shipping lanes [13]. This is a situation where legal uncertainty coexists with a real-world recovery.
Fourth is the limit of Iran's domestic economic endurance. The spread of panic buying and labor protests suggests that the effectiveness of the sanctions has reached a palpable stage [16]. Whether this internal pressure will serve to reinforce the regime's hardline stance or act as an incentive for negotiation is a point that requires observation over the coming weeks.
References
[1] [Economic Times] The dreaded 'N' word is back again as Trump runs out of Iran options
[4] [DW (Deutsche Welle)] Will Iran withdraw from nuclear non-proliferation treaty?
[9] [Arab News] White House says no negotiations with Iran, all options on table
[11] [Foreign Policy] Why Iran Might Escalate
[13] [Gulf News] Iran’s Hormuz weapon is slipping away. What’s Tehran’s next move?
[14] [Foreign Affairs] The Long Shadow of the Iran Shock
[16] [The Wall Street Journal] Labor Protests and Panic Buying Signal Growing Pressure in Iran
[17] [Haaretz] Iran nuclear chief says international organizations are 'pawns' of U.S. and Israel
[18] [Daily Sabah] 6 months into US-Iran war: How it shapes global markets
[19] [The National (UAE)] Manus on MarketsUS-Iran escalation ahead of SCO summit
[23] [Al-Monitor] War weighs on Iran's economy as US intensifies sanctions
[25] [Channel News Asia] White House says no negotiations with Iran, all options on table
*This text is an AI translation of an original written in Korean. Some translations or nuances may be inaccurate.
This report is an in-depth analysis planned by an EAI researcher, grounded in sophisticated AI-assisted research, and finalized by the EAI researcher.
How can I help you?