IAEA chief warns Iran inspection standoff cannot last

Rafael Grossi, director general of the International Atomic Energy Agency, warned at the World Economic Forum in Davos that the standoff with Iran over access to nuclear sites "cannot go on forever," underscoring an intensifying verification crisis that has geopolitical and economic ramifications.

The dispute traces to a 12-day conflict in June 2025 in which military strikes on or around June 13 damaged facilities at Natanz, Fordow and Isfahan. Tehran then suspended routine cooperation with the IAEA after a widely circulated video on June 30 and passed a law in July requiring approval from the Supreme National Security Council for any future inspections. Inspectors remain in the country, but access to some damaged sites is limited and, according to the IAEA, they are not cooperating "at the level they should."

The agency has relied in part on satellite imagery to monitor sites, a tool that provides valuable but incomplete information. Inspectors have not observed enrichment above pre‑June levels, but recent activity has been detected around stores of uranium enriched to 60 percent. The IAEA cannot confirm on the ground that that material has not been diverted, leaving a central verification question unresolved. Grossi has warned that Iran's stockpile of highly enriched uranium "could allow Iran to build as many as 10 nuclear bombs" if it decided to weaponize its programme, while stressing that detection of such capability is not the same as evidence of actual weapons.

Diplomatic efforts have produced intermittent signals of progress. Grossi told the IAEA Board of Governors in Vienna on September 8 that "progress has been made" in talks on resuming inspections but added there is "not much" time remaining to resolve access and accounting issues. He has also reported being in regular contact with Iranian deputy foreign minister Abbas Araghchi, even while describing limits to cooperation.

The standoff has immediate policy consequences. France, Germany and the United Kingdom moved to reimpose U.N. sanctions late in the summer by activating a snapback mechanism, tightening the legal landscape for trade and finance linked to Iran's nuclear and ballistic missile programs. European security agencies have reported that procurement networks remain active despite sanctions, pointing to deliveries of material such as sodium perchlorate to the port of Bandar Abbas that could have dual use in missile production. Those developments complicate export controls and raise enforcement costs for banks and trading houses.

Markets are sensitive to the trajectory of the dispute. Heightened regional risk typically elevates insurance premiums for shipping in the Gulf and raises the risk premium priced into oil markets, potentially amplifying price volatility even if physical supply disruptions do not occur. Reimposed sanctions and procurement circumvention also affect long-term capital allocation, increasing risk for firms with exposure to Middle Eastern trade, energy infrastructure and defense manufacturing.

The IAEA's warnings frame a choice for policymakers: negotiate binding procedures for post‑attack inspections to restore verification, or face a protracted blind spot that could erode global nonproliferation norms. Tehran's condition that the agency first clarify whether the strikes were authorized, and its new legislative requirement for Supreme National Security Council approval of inspections, are substantial obstacles to immediate resolution. With Grossi pressing for prompt, full cooperation, the coming weeks will determine whether verification can be restored before the gap in oversight becomes permanent and feeds broader regional instability.