Iran backs dilution of 440 kg uranium stockpile as nuclear deal nears

Iran's insistence on diluting rather than exporting its near-weapons-grade uranium stockpile marks a critical juncture in US-mediated nuclear negotiations that could determine the fate of energy markets across the Middle East.

Iran told the US it will only dilute its stockpile of 440.9 kilograms of uranium enriched to 60% purity rather than ship it abroad, narrowing the path to a nuclear deal that could reshape oil markets.

"For Tehran, the only preferred option for disposing of highly enriched uranium stockpiles is to dilute the relevant materials," Iranian Foreign Minister Abbas Araghchi said, according to state media.

The position contradicts earlier US assurances to Israel that any agreement would require the material's removal from Iran. Washington had pressed for export, but the New York Times reported Tuesday the US will now work with the International Atomic Energy Agency to dilute the stockpile in place. The IAEA estimates Iran held 440.9 kg of 60% enriched uranium before US and Israeli strikes hit its nuclear facilities in June 2025 — enough for as many as 10 bombs, according to IAEA Director-General Rafael Grossi.

The dilution compromise removes a key obstacle to a broader agreement that would suspend Iran's enrichment for 15 years, reopen energy transit routes through the Strait of Hormuz — which handles about 21% of global oil trade — and potentially unlock Iranian crude exports that have been constrained by sanctions since 2018.

Four Pillars of Negotiation

US and Iranian negotiators, meeting in Pakistan-mediated talks, have narrowed discussions to four core issues, according to US officials cited by the Times. Beyond the stockpile question, the sides are negotiating a 15-year suspension of enrichment — a compromise between Washington's demand for 20 years and Tehran's offer of 10. Iran has also shown willingness to close two of its three main nuclear sites at Natanz, Fordo and Isfahan, all heavily damaged in the June 2025 airstrikes, while keeping the third operational.

The fourth issue — US demands for snap inspections of any nuclear site, including those within Islamic Revolutionary Guard Corps military bases — remains unresolved. The IAEA board voted 21-3 on Wednesday to demand Iran provide "complete information" about its stockpile and grant inspectors access, though the resolution stopped short of referring Tehran to the UN Security Council. Russia, China and Niger opposed the measure while 10 countries abstained.

Market Stakes and Forward Outlook

President Donald Trump said Wednesday that Iran had apologized for what he called false information and that a deal could be signed as early as this weekend in Geneva, potentially as a memorandum of understanding. Any agreement that constrains Iran's nuclear program and eases sanctions would likely reduce the geopolitical risk premium embedded in crude prices. Brent crude has traded with a $5-to-$8 per barrel war premium since the June 2025 conflict, according to analysts tracking the spread between physical and futures markets.

The last time the US and Iran reached a nuclear framework — the 2015 Joint Comprehensive Plan of Action — Iran's oil exports rose from about 1 million barrels per day to 2.5 million within 18 months, adding supply that helped keep Brent below $60 a barrel. A return of even half that volume today would pressure OPEC+ cohesion and test the alliance's ability to manage spare capacity estimated at 5 million to 6 million barrels per day, mostly held by Saudi Arabia and the UAE.

Iran has also demanded sanctions relief and the release of frozen assets before a final agreement, conditions Trump has rejected. The IAEA board's resolution leaves open the possibility of referring Iran to the UN Security Council for further sanctions if compliance does not improve, keeping diplomatic pressure on Tehran even as a deal appears within reach.

This article is for informational purposes only and does not constitute investment advice.