Trade Idea: US-Iran nuclear deal in 2025?
Market: US-Iran nuclear deal in 2025?
Trade: No
Current Odds: 51%
Return: 96%
Resolved by: End of 2025 (could be shorter if negotiations collapse)
Position Size: Medium
Hey everyone! Welcome back to The Poly. I know it's been quiet around here since our last trade. Honestly, there just haven't been many compelling opportunities worth jumping on. The markets have been pretty efficient lately, which is both good and bad news for us. We do our best work when geopolitics gets messy and creates pricing gaps, but things have been relatively calm since that India-Pakistan situation we covered earlier.
That said, something interesting has finally caught my attention: the US-Iran nuclear deal. There's some real potential here, so let's dive in.
Why a US-Iran Nuclear Deal Probably Won't Happen This Year
The US and Iran have been dancing around a new nuclear agreement for years now, and frankly, it's not going well. Ever since Trump pulled out of the original Iran nuclear deal back in 2018, both countries have been trying to figure out how to get back to the negotiating table, but they keep running into the same brick walls. The latest round of talks in Rome this month were pretty much a bust. Iranian officials are already downplaying expectations, which tells you everything you need to know about where things stand.
Both sides have drawn lines in the sand that the other simply won't cross. Add in domestic politics on both sides, plus all the regional complications in the Middle East, and you've got a recipe for continued stalemate. Let's break down why 2025 is looking like another year of diplomatic wheel-spinning rather than breakthrough moments.
What Went Wrong: From Nuclear Deal to Nuclear Standoff
Back in 2015, the world managed to pull off something pretty remarkable. The Iran nuclear deal (officially called the JCPOA) was genuinely tough on Iran's nuclear program. Iran agreed to get rid of 98% of its enriched uranium stockpile, cap enrichment at levels way below weapons-grade, and basically gut two-thirds of their centrifuge capacity.
The deal also flipped some key facilities from potential weapons sites into research centers, and gave international inspectors much better access to keep tabs on everything. The bottom line was that Iran went from being maybe a few months away from having enough material for a bomb to needing over a year. That was a huge win for nonproliferation.
Fast-forward to May 2018, and the Trump administration decided the deal wasn't good enough. The Trump admin argued that it didn't cover Iran's missile program or their support for proxy groups across the Middle East. So they walked away, slapped sanctions back on, and even labeled Iran's Revolutionary Guard as a terrorist organization.
Iran's response was predictable: they started breaking their commitments too. Uranium enrichment crept up, hitting 60% by 2023, and they began blocking some international inspections. Now, in 2025, we're seeing traces of uranium enriched to near-weapons levels (90%), which has everyone seriously worried about how close Iran might be to actually building a bomb.
Why Nobody Can Agree on Anything
The Biden team started out wanting to just get back to the old 2015 deal, but the US have gotten a lot tougher since then. Now they're pushing for Iran to give up uranium enrichment entirely and forever. That's a big departure from the original agreement, which would have let Iran resume some enrichment after 10-15 years. This hardline approach isn't happening in a vacuum. Republicans in Congress are breathing down the administration's neck, and just this month they sent a letter basically telling Trump not to accept any deal that lets Iran enrich uranium at all. The US also wants way more intrusive inspections and limits on Iran's missile program.
Iran sees this completely differently. Their foreign minister put it bluntly in May: "zero enrichment means no deal." From their perspective, enrichment is a basic right under international law, and they're willing to keep it low-level for civilian use, but they say a total ban is not happening. They're also demanding that the US lift all sanctions, not just the nuclear-related ones, but everything, including the terrorist designation for their Revolutionary Guard. And here's the kicker: Iran wants to see actual sanctions relief before they start rolling back their nuclear program, while the US wants Iran to make the first move. It's a classic chicken-and-egg problem that's been killing talks since 2021.
Why This Keeps Falling Apart
The biggest problem here is that both sides think the other is fundamentally untrustworthy. Iran looks at Trump pulling out of a deal they were actually following and thinks, "Why should we believe anything America promises?" Meanwhile, US officials see Iran steadily ramping up its nuclear program since 2018 and think, "These guys are obviously not serious about peaceful nuclear energy." Making things worse, international inspectors have had less access to Iranian facilities since 2023, so we're basically negotiating in the dark about what Iran is actually doing. Hard to build trust when you can't even verify what's happening.
Nuclear deals with Iran have become a political football in Washington. Biden came in wanting to restore the original agreement, but Republican pushback and electoral losses forced him to take a much harder line. Now Trump's back in office and trying to cut a deal, but his own party is fighting him on it. Over 200 Republican lawmakers are basically demanding Iran dismantle its entire nuclear program, which is a non-starter that leaves Trump with almost no room to negotiate. The political reality is brutal: any compromise with Iran could cost Trump support from his base, so the incentives all point toward taking the toughest possible stance.
Iran has its own political mess to deal with. The country's Supreme Leader and hardliners see their nuclear program as essential for survival, both against external threats and for maintaining regional influence. The moderates who might be willing to make deals got burned badly when Trump pulled out of the 2015 agreement, and they've lost a lot of credibility. The Revolutionary Guard, which is now officially designated as a terrorist organization, has major political clout and opposes any deal that might weaken their regional proxy networks. With Iranian presidential elections coming up, nobody in Tehran wants to look weak by making concessions to America.
The Neighborhood Isn't Helping
The regional picture has gotten messy since 2015. Saudi Arabia and the UAE, who absolutely hated the original Iran nuclear deal, are now quietly telling the US they'd rather see diplomacy than another war. That's sort of progress?
But then there's Gaza. The ongoing conflict has put a spotlight on Iran's backing of Hamas and Hezbollah, making it politically toxic for the US to be seen cutting deals with Tehran. The Gulf states might want stability, but they're also crystal clear that any nuclear agreement needs to come with serious limits on Iran's support for militant groups across the region. That's a tall order when Iran sees these proxy relationships as core to their strategic influence.
The EU has been trying to broker talks between the US and Iran since 2021, with diplomat Enrique Mora shuttling between capitals like some kind of nuclear deal Uber driver. But after four years of this, European officials are openly admitting they're exhausted by the whole process.
Iran won't talk directly to the US, which means everything has to go through intermediaries, slowing down what's already a painfully slow process. Mora's latest trip to Tehran in May was basically a fact-finding mission — Iranian officials made it clear they weren't ready for anything serious. When even your mediators are running out of patience, that's not a great sign for getting a breakthrough.
So Where Does This Leave Us?
Every major obstacle that killed previous negotiations is still there, and some have gotten worse. The US and Iran are further apart on their core demands than they were in 2021. Trust between the two sides has completely broken down. Both countries are dealing with domestic political pressures that make compromise nearly impossible. Add in the regional chaos from Gaza, European diplomatic fatigue, and the fact that Iran is now closer to weapons-grade uranium than ever before, and you've got a situation where everyone knows a deal would be better than the alternative, but nobody can figure out how to actually get there.
The smart money says we're headed for more of the same in 2025: periodic diplomatic theater, incremental escalation, and a lot of people in Washington and Tehran secretly hoping the other side blinks first.
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