While fundamentals spell more upside…
Undeterred by Trump’s threats to…
Iran is ready to begin curtailing its nuclear program now that the country’s Guardian Council has given final approval for the nuclear agreement Tehran worked out with six world powers.
On Oct. 14 the 12-member panel approved the vote taken a day earlier by Iran’s Parliament to accept the deal worked out by Germany and the five permanent members of the United Nations Security Council – Britain, China, France, Russia and the United States.
These powers, known as the P5 Plus One, reached agreement with Iran on July 14 on the measure, known as the Joint Comprehensive Plan of Action (JCPOW), under which Tehran agreed, among other things, to greatly reduce the number of centrifuges needed to enrich uranium, to limit its supply of nuclear material and dismantle one of its two uranium plants and convert it into a research institute.
It also calls for the U.N.’s nuclear supervisory office, the International Atomic Energy Agency (IAEA), to dispatch inspectors to Iran to determine whether such work is being done. If the inspectors confirm this, the economic sanctions imposed on Iran, which have badly stunted its economy, can be lifted.
Related: Iran Could Trigger A Resource War On Several Fronts Other Than Oil
For the past year Iran has expressed optimism about whether it could reach the JCPOW agreement and how quickly it could restore oil production once the sanctions are lifted. It was right about reaching agreement, and some outside experts say they agree with Oil Minister Bijan Zanganeh, who says his country can increase oil output by 500,000 barrels per day within a week and by more than 1 million within a month.
Now President Hassan Rouhani says he expects the IAEA will confirm within “no more than a month or two” that Iran is complying with the agreement. That would mean resuming robust oil production could begin by the end of 2015. Most observers don’t expect that to happen until early 2016. Whenever the sanctions are lifted, however, it appears Iran will return to the world oil market fairly soon.
The Guardian Council is made up of six Shi’a Muslim clerics appointed by Iran’s supreme leader, Ayatollah Ali Khamenei, and six lawyers appointed by Sadegh Larijani, the head of Iran’s judiciary. Its job is to ensure that laws passed by Parliament don’t run afoul of both Iran’s constitution and the Muslim law.
Related: Canadian Utilities Embarking On Asset Acquisition Strategy In U.S.
A spokesman for the council, Nejatollah Ebrahimian, said it approved the agreement “by an absolute majority of the votes,” but didn’t give a breakdown of the vote. He said only that some members “raised objections to the bill and found it contrary to the constitution. There were debates.”
The JCPOW is strongly opposed by hard-line groups in both the United States and in Iran.
Republicans, who make up a majority of both houses of the U.S. Congress, were unable to muster enough votes to block approval of the deal.
Iranian hard-liners also opposed any effort to move their country closer to the West, particularly the United States, and on Oct. 13, the day Parliament approved the deal, some members complained that Khameni had endorsed it, ensuring its approval. Khameni’s office called these complaints false.
Related: The End Of The Oil Major?
In fact, Khameni’s position on the agreement isn’t known for certain. His only positive comments on it have involved his approval of the hard work of Rouhani’s team of negotiators.
The legislation passed by Parliament and approved by the Guardian Council includes more than approval of the JCPOW. It also makes the country’s Supreme National Security Council, under Rouhani, responsible for limiting Iran’s nuclear program and forbids Iran to produce or deploy nuclear weapons.
And it directs the Tehran government to work for the nuclear disarmament of Israel. Israel is widely believed to have nuclear weapons, but has not declared whether that suspicion is correct.
By Andy Tully of Oilprice.com
More Top Reads From Oilprice.com:
Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com