The UN agency, based in Vienna, has been struggling since 2021 to carry out controls on Iran's nuclear program.
"It's a very frustrating situation. We continue our activities there, but at a minimum," Grossi said in an interview at the World Economic Forum in Davos. "They are restricting cooperation in a very unprecedented way."
He cited as an example Iran's rejection of inspectors because of their nationalities.
"It's a way to punish us because of external things," he said. "When there's something that France, the UK or the United States says that they don't like, it is as if they were taking the IAEA hostage to their political disputes with others. This is unacceptable for us."
An IAEA report released in November found there has been no progress on the IAEA investigation into uranium traces found at several undeclared sites in Iran.
Iran a few months ago escalated the conflict with the IAEA by withdrawing accreditation from several top UN nuclear watchdog inspectors.
The Islamic Republic has also increased the rate at which it is producing near weapons grade uranium as a standoff with world powers over the 2015 nuclear deal continues.
"There is a plateau at the moment, but it could change in the next few days," Grossi said. "We never know."
Iran has scaled back its compliance with the 2015 nuclear deal in response to former President Donald Trump’s withdrawal from the agreement in 2018.
The Biden administration sought to return to the deal and held indirect talks with Iran on a return to compliance, but the negotiations reached a stalemate last September, after Iran submitted a response to a European Union proposal to revive the deal.
A US official later said that the efforts to revive the 2015 Iran nuclear deal have “hit a wall” because of Iran's insistence on the closure of the UN nuclear watchdog's investigations.
