• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 7 days What fool thought this was a good idea...
  • 10 days They pay YOU to TAKE Natural Gas
  • 10 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 5 days A question...
  • 16 days The United States produced more crude oil than any nation, at any time.

What Iran Should Do If JCPOA Fails

The negotiations to revive the Joint Comprehensive Plan of Action (JCPOA) between Iran and the P5+1 (China, France, Russia, the United Kingdom, the United States, and Germany) are, to use a current term, “under medical supervision.”

Iranian Foreign Minister Hossein Amirabdollahian declared that a successful agreement requires Washington’s “realism and determination.” United States (U.S.) Secretary of State Antony Blinken said a deal is “unlikely.”

France, Germany and the United Kingdom said they would consult with their partners about Iran’s “continued nuclear escalation and lack of cooperation.” And the United Nations said flexibility from all parties is necessary.

Israel’s spy chief added that the Jewish state won’t “stand idly by” while Iran forges ahead with its nuclear program.

We may never know for sure if one side, or both sides, thought conflict was more lucrative than getting to an agreement and let the negotiations founder - while blaming the other, of course.

For the observant the objective of the exercise always was to slow down, not stop, Iran from developing nuclear capability? Why? Because those proud Persians were never going to let eccentric North Korea and chaotic Pakistan one-up them. And Iran’s leaders saw what happened to Libya’s Muammar Gaddafi who ended his nuclear weapons program 2003 but was killed in 2011, and think nukes will make their country invasion proof. And even if there is a deal, Iran’s leaders anticipate the U.S. and the European Union (EU) will impose new sanctions before the ink is dry on the agreement.  

If the negotiations end it’ll be a sad day for hoteliers in Vienna, but Iran has plenty of items on its “To do” list.

First, keep working on the nuclear program, but stay below the threshold that will prompt Israel to attack. The country has made great strikes despite extensive sanctions, but it may be time to reassign some of the scientists and engineers to civil projects to broaden and strengthen its parlous economy and make it more attractive to China, its partner in a twenty-five-year, $400 billion strategic and economic partnership, which will be on a more solid foundation if Iran can introduce its own innovations instead of just plugging in China’s IT and telecoms technology.

In that vein, keep working on its missile program which was described as “the largest and most diverse ballistic missile arsenal in the Middle East.” Iran’s defense program was recently given a boost by the launch of the remote-sensing Khayyam satellite which will probably be used to surveil Iran’s opponents.

Related: IEA: Russian Crude Ban Will Take 2.4 Million Bpd Off The Market

Then, continue the “Look to the East” policy to engage China and the members of the Eurasian Economic Union (EEU), Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia, and observers Cuba, Moldova, and Uzbekistan, connections that may be strengthened by Iran’s joining of the Shanghai Cooperation Organization.

But it won’t be inconsistent for Iran to make an effort to draw closer to United Arab Emirates and Saudi Arabia, though the two Arab states are U.S. clients and will go only as far as Washington allows. But closer relations and an effort at transparency may moderate the potential for future disputes, especially as the Kingdom develops its own ballistic missile capability.

Unlike the U.S., the secular Central Asian states have no baggage regarding the Islamic Republic, but they will be sensitive to a pushy regional hegemon, having just escaped the Russian and Soviet empires, and positively allergic to a proselytizing neighbor.

The Central Asian republics see Iran as a potential export corridor to India and the Persian Gulf, a Plan B if the mooted Central Asia-Afghanistan-Pakistan trade route fails to launch. In addition, Iran has a large, youthful market of about 85 million and hopes to quadruple its trade with Uzbekistan, a noted agricultural producer.

Afghanistan may be Iran’s greatest local challenge as the two countries share a porous 900-mile border across which flow refugees and narcotics. Iran’s supreme leader, Ali Khamenei, said of the Taliban government, “The nature of our relations with governments depends on the nature of their relations with us” though cash-strapped Kabul will be unable to commit to any policies requiring much spending, such as helping secure the shared border.

The U.S. retreat from Afghanistan may vindicate Tehran’s “Axis of Resistance” strategy and may embolden the regime to continue to undermine U.S. interests or offer China an opportunity to use its territory to surveil U.S. forces in the region.

Iran should focus on the International North–South Transport Corridor (INSTC) which connects India, Iran, Azerbaijan, Russia, Central Asia and Europe, and has been described by Iranian observers as a “sanction-proof route” that is “30 percent cheaper and 40 percent shorter than the traditional route via the Suez Canal.” The INSTC will connect with the Chabahar port with was developed with India, though the project has recently been bedeviled by differences over the dispute resolution mechanism.


Tehran may choose to support a Hezbollah “Ministry of Energy.” Lebanon and Israel are locked in a maritime boundary dispute that will determine the share-out from lucrative natural gas fields in the Eastern Mediterranean. Hezbollah is the real government of Lebanon and Iran can increase its leverage in Lebanon if it tutors Hezbollah officials in the natural gas business (Iran has the world’s second-largest reserves of natural gas.)

Russia’s Gazprom and the National Iranian Oil Company recently signed a $40 billion oil and gas agreement which will see “Gazprom assist Iran’s state oil company in the development of both oil and gas fields and the construction of LNG project pipelines,” likely aimed at optimizing production from the supergiant South Pars gas field that Iran shares with Qatar. 

If JCPOA 2.0 fails, will the parties ever be ready for a third bite of the apple? We’ll see, but Iran should engage with its Gulf neighbors to discuss mutual regional defense concerns, including its nuclear and missile programs. The U.S. and Europe will remain opposed to anything Tehran does, so Tehran should focus on improving regional relations to ease tensions and reduce business risk in the region.

Iran’s leaders have goals that are clear to explain but may be difficult to achieve: promote regional trade that will help continue the post-COVID recovery despite sanctions that aim to force the Iranian population to rebel by impoverishing them, and avoid the fate of the late-state Soviet economy which was only competitive in weapons and hydrocarbons by applying its technology expertise outside the defense realm.

By James Durso for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • Mamdouh Salameh on September 16 2022 said:
    Since the start of the talks in Vienna early this year, I have repeatedly been saying that the only nuclear deal Iran might accept is one on its own terms, meaning a lifting of all US sanctions first, no new restrictions on its nuclear and ballistic missile development programmes and a removal of the Islamic Revolutionary Guard Corps (IRGC) from the terrorist list. This is something the United States egged by Israel will never accept.

    In the absence of a nuclear deal, Iran could focus its efforts on achieving the following geopolitical and economic objectives.

    1- Consolidating its presence and influence in Iraq and this means working on ejecting US military presence from Iraq. By forcing the removal of American forces from Iraq, Iran would win a spectacular geopolitical war in the Arab Gulf against the United States and emerge the undisputed leader of the Gulf region.

    2- Sensing the political shift by Saudi Arabia and UAE away from the United States as demonstrated by their refusal to condemn Russia’s military operations against Ukraine, Iran may endeavour to reach a rapprochement with the two powerful Arab Gulf States and to prevent the United States from playing Saudi Arabia against Iran and vice versa.

    3- Iran will continue to work towards nuclear weapons and missiles capable of carrying them. However, it will only make all the ingredients for nuclear warheads ready for assembly at short notice without actually producing the actual warheads to avoid war with Israel.

    4- Iran will continue to strengthen its relations and cooperation with both China and Russia because the China-Russia-Iran alliance is on the ascendency at the expense of the US-UAE-Israel-India axis particularly after India jumped ship. China has committed $400 bn for the development of Iran’s oil production and other military projects while Russia will help develop Iran’s huge proven gas reserves, the second largest in the world after Russia.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News