US Shows Flexibility on Limited Iranian Nuclear Activity

The United States has signalled a degree of flexibility on Iran maintaining limited peaceful nuclear activity under International Atomic Energy Agency supervision, Reuters reported citing a senior Iranian official, even as Washington holds firm on the release of frozen Iranian assets — agreeing to unblock only one-quarter of funds under a phased schedule.

The development, reported Monday, marks a potentially significant shift in the American position ahead of what both sides describe as ongoing negotiations conducted through Pakistani intermediaries. The talks have been underway for weeks, with Islamabad serving as a quiet go-between after direct diplomatic channels were severed.

What Washington Is Offering

According to the Reuters account cited by Middle East Eye, the US position now contemplates a framework under which Iran could retain a constrained enrichment capacity, provided it operates under close IAEA monitoring. The precise enrichment ceiling and inspection terms have not been disclosed publicly.

On the financial side, the US is prepared to release a fraction of frozen Iranian assets, but the timeline is graduated and tied to verified compliance steps. According to the Reuters report, Washington has agreed to unblock roughly one-quarter of funds initially, with subsequent tranches dependent on Iranian conduct — a structure that Tehran has historically resisted as unequal. That sequencing is likely to generate pushback from Iranian negotiators who have demanded upfront access.

Tehran’s Public Position

Iran’s foreign ministry spokesman Esmaeil Baghaei was direct in response. Speaking Monday, Baghaei said Iran’s right to nuclear enrichment “already exists” under international law and is not subject to negotiation. The formulation is a standard Iranian framing, but its repetition at this stage of talks indicates Tehran is not prepared to accept any agreement that casts enrichment as a concession rather than a pre-existing right.

The distinction matters. Washington and its partners want language that treats limited enrichment as a permitted exception within an agreement. Tehran wants language that treats enrichment as an inherent right that a deal merely regulates. Previous negotiations over similar formulations have stalled for years.

That said, Iran’s foreign ministry confirmed separately that the talks are continuing, signalling the two sides have not broken off contact despite the public divergence. See our earlier coverage of Iran’s response transmitted through Pakistan.

G7 Sanctions Pressure Runs Parallel

While diplomatic channels remain open, the United States is simultaneously pressing its partners to tighten the economic vise. US Treasury Secretary Scott Bessent called on G7 countries to adopt US-led sanctions on Iran, a move that would close off remaining European and Asian trade lifelines. The dual-track approach — talks and maximum pressure running concurrently — mirrors the strategy employed during earlier Iran deal negotiations.

Whether the G7 will move in lockstep remains uncertain. Several European members have expressed reservations about escalating sanctions while diplomacy is still active. A fuller breakdown of the G7 pressure campaign and Iran’s enrichment red line is available here.

IRGC Strikes in Northern Iraq

Separately, Iran’s Islamic Revolutionary Guard Corps announced it had conducted strikes against groups in northern Iraq that it described as smuggling US- and Israeli-origin weapons into Iranian territory, according to Middle East Eye. The IRGC framed the operation as defensive interdiction. Iraqi officials had not confirmed or commented publicly at the time of this report.

The strikes add a kinetic dimension to a week already defined by diplomatic maneuvering, and they come as Iran has also moved to institutionalize its control over the Strait of Hormuz. Details on Iran’s new Hormuz authority body are here.

Oil Markets Feel the Squeeze

Energy markets face compounding pressure from two directions. The expiration of US General License 134B on May 16 reinstated sanctions that had allowed India to purchase Russian crude — a waiver the Trump administration allowed to lapse without renewal, according to OilPrice.com. Asian refiners that had been managing Iran-related supply disruptions by leaning on Russian barrels now face constraints on both fronts.

The timing puts additional strain on global oil supply chains at a moment when the Iran nuclear file remains unresolved.

What Comes Next

The coming days will test whether the reported US flexibility on enrichment is enough to move Iranian negotiators past their asset-release objections. Pakistan’s role as intermediary gives both sides a degree of deniability, allowing the talks to continue without either government appearing to make direct concessions.

US military positioning in the region also continues to evolve — recent reporting on American ammunition flights to Israel underscores that Washington is maintaining its military options even as it pursues a diplomatic track.

An agreement, if it emerges, would require verification mechanisms strong enough to satisfy a skeptical US Congress — and flexible enough that Tehran can present it domestically as something other than capitulation on a point of declared national principle.