A photo taken on November 10, 2019, shows an Iranian flag at Iran’s Bushehr nuclear power plant, during an official ceremony to kick-off work on a second reactor at the facility.

ATTA KENARE | AFP via Getty Images

Russia has reversed its threat to torpedo the revival of the 2015 Iran nuclear deal over recent sanctions imposed following its invasion of Ukraine, reopening the road to an agreement after nearly a year of negotiations.

The parties involved in the pact, formally known as the Joint Comprehensive Plan of Action, or JCPOA, were reportedly close to reaching a deal in Vienna until the US and EU imposed sweeping sanctions on Russia over its invasion of Ukraine. . Moscow then demanded that future trade with Iran not be affected by Western sanctions, suspending talks last week.

Russian Foreign Minister Sergei Lavrov said on Tuesday he had received “written assurances” from the US that their demands would be met, meaning talks are likely to continue. The near-simultaneous release of British-Iranian dual nationals from years of Iranian detention back to the UK and a reported British repayment of a decades-old $530 million debt to Iran have improved prospects for an agreement.

“Deal could close fairly quickly — possibly as early as this week,” analysts at political risk consultancy Eurasia Group wrote in a note on Wednesday.

“Russia’s decision to moderate its demands removes the main hurdle to reviving the JCPOA,” the analysts wrote, estimating the chance of an agreement at an optimistic 80%. “The release of the two British-Iranian detainees is another positive sign that talks are nearing completion,” they said.

Iranian oil back on the market?

With the US cutting Russian oil imports and the EU looking to reduce its energy dependency on Moscow, Iranian crude looks more attractive – as does crude from other heavily sanctioned countries like Venezuela, which has reportedly been in energy talks with US officials. .

A return to the 2015 agreement, which originally lifted sanctions against Iran in exchange for restrictions on its nuclear program, would mean the return of Iranian oil to the market at a time when energy shortages and geopolitical volatility have pushed crude prices to their highest levels. brought in over a decade.

This would “boost global oil supplies and could put downward pressure on prices,” James Swanston, Middle East and North Africa economist at London-based Capital Economics, wrote in a note Thursday, adding that “It may also help to ease geopolitical tensions in the region.” Still, a return to earlier production levels will take time.

Commodities analysts at S&P Global Platts predict that if sanctions against Iran were lifted immediately, it could export an additional 500,000 barrels of oil per day to the markets from April to May this year, at an additional 1.3 million barrels per day. at the end of this year.

Iran was the fifth largest producer in OPEC in 2020. Before Donald Trump’s administration unilaterally canceled the deal in 2018 and reimposed crippling sanctions on Iran’s economy, the country was producing 3.8 million barrels of oil per day. This later dropped to just 1.9 million barrels and is currently around 2.4 million barrels per day, according to the Atlantic Council – although most of this had to remain in storage rather than exported due to sanctions.

Since the US withdrawal from the deal, Tehran has made significant strides in its nuclear activity, increasing uranium enrichment and stockpiles well beyond the parameters of the 2015 agreement.

This means that it has shortened its “breakthrough time,” or the amount of time it takes to build an atomic bomb. Iran’s leaders said its claims would continue until US sanctions are lifted.

Allies in the Gulf of Washington not happy

Eleven months after the resumption of negotiations, with the US and Iran speaking not directly but through European mediators, the remaining sticking points focus mainly on sanctions-related issues, including whether Iran’s Islamic Revolutionary Guard Corps will continue to be supported by the US. designated as a Foreign Terrorist Organization list.

“But these are unlikely to prove insurmountable,” Eurasia analysts say, as both Washington and Tehran want a deal.

The prospect of a return to the deal did not sit well with the Arab Gulf allies in Washington, especially Saudi Arabia and the United Arab Emirates, two of OPEC’s leading crude oil producers and long-standing opponents of Iran. The two reportedly did not take calls from President Joe Biden when he tried to convince them to increase their oil production to ease rising prices.

OPEC has not announced steps to increase production beyond the pre-planned increases agreed in 2021 between OPEC members and their non-OPEC allies, led by Russia.

This post Russia withdraws from demands in Iran nuclear deal talks, imminent revival of 2015 pact

was original published at “https://www.cnbc.com/2022/03/18/russia-backs-down-on-demands-in-iran-nuclear-deal-talks-making-revival-of-2015-pact-imminent.html”