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Addressing the Iran nuclear deal, EU Foreign Policy Chief Josep Borrell noted "sometimes they think they’re almost there. And other days not." That seems to be a succinct summary of what is happening with the Vienna talks.
Borrell came in trying to facilitate the tail end of negotiations, but is now suggesting that Iran is the hold-up, and that the status of the Revolutionary Guard (IRGC) being removed from a terror blacklist is clearly part of what’s slowing this down.
That’s a surprise, as previous reports were that the IRGC de-listing deal was separate from the Vienna deal. Iran, moreover, had issued statements suggesting the two didn’t need to be resolved at once. Here's what Borrell said:
"The JCPOA, it’s not getting to an end," Borrell told the European Parliament after returning from a trip to the Gulf, referring to the accord formally known as the Joint Comprehensive Plan of Action.
"It would be a shame not to reach some sort of an agreement when we’re so near to reaching one. But I cannot guarantee that we will reach an agreement," he said.
Borrell offered some other details on what’s been happening in recent weeks, including that one of Russia’s concerns was that the sanctions relief would put Iran’s oil back on the market, lowering prices and potentially costing Russian oil major revenues.
Days ago, Borrell blasted Russia at the Doha Forum:
"It seems that two weeks ago, we almost had it. Then Russia came, Russia was obstructing," by withholding approval of what seemed a done deal because Moscow was looking for leverage over the West in its war in Ukraine, Borrell told MEPs in Brussels.
Specifically, he said, Russia wanted to prevent sanctions on Iranian oil being lifted "because if Iran started producing oil there will be more supply in the markets, and that’s not in the interest of Russia."
That too is interesting, as the price of oil was seen as a big reason for the Iran deal right now. Borrell said it was resolved with a confidential assurance to Russia on overall trade, which is interesting because the US is very much resisting any deals with Russia recently.
Borrell indicated that his team is making the rounds between Tehran, Vienna, and DC trying to work something out. Long story short, however, it seems that the deal could either happen really soon, or continue to get dragged on with minor delays.
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In the event that US sanctions against Iran were lifted, the maximum Iran could bring to the market is 650,000 barrels a day (b/d) being the difference between pre-sanctions and post-sanctions Iranian crude exports. This volume is a mere drop in the ocean of global oil demand in the current very tight market.
What may be more plausible is that Russia wants to prevent the extension of Western sanctions against it to its interests with Iran.
It was the United States who offered to remove the status of the Islamic Revolutionary Guard Corps (IRGC) from a terror blacklist causing vehement objection from Israel and forcing the United States to rethink its offer. Now Iran considers this offer an integral part of the deal.
The EU Foreign Policy Chief must realize that the only deal Iran is prepared to accept is one on its own terms meaning a full lifting of sanctions against it, no new restrictions on its nuclear and ballistic missile development programmes and a lifting of the IRGC from a terror blacklist.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London