Iran demands lifting sanctions

Indirect talks between Iran and the United States on salvaging the 2015 Iran nuclear deal resumed with Tehran focusing on one side of the original bargain, lifting sanctions against it, despite scant progress on reining in its atomic activities.

The seventh round of talks, the first under Iran's new hard-line President Ebrahim Raisi, ended after adding some new Iranian demands to a working text. Western powers said progress was too slow and negotiators had ‘weeks not months’ left before the 2015 deal becomes meaningless.

Little remains of that deal, which lifted sanctions against Tehran in exchange for restrictions on its atomic activities. Then-President Donald Trump pulled Washington out of it in 2018, re-imposing US sanctions, and Iran later breached many of the deal's nuclear restrictions and kept pushing well beyond them.

"If we work hard in the days and weeks ahead we should have a positive result.... It's going to be very difficult; it's going to be very hard. Difficult political decisions have to be taken both in Tehran and in Washington," the talks' coordinator, European Union envoy Enrique Mora, told a news conference.

He was speaking shortly after a meeting of the remaining parties to the deal - Iran, Russia, China, France, Britain, Germany and the European Union - formally kicked off the round.

"There is a sense of urgency in all delegations that this negotiation has to be finished in a relatively reasonable period of time. Again, I wouldn't put limits but we are talking about weeks, not about months," Mora said.

Iran refuses to meet directly with US officials, meaning that other parties must shuttle between the two sides. The United States has repeatedly expressed frustration at this format, saying it slows down the process, and Western officials still suspect Iran is simply playing for time.

The 2015 deal extended the time Iran would need to obtain enough fissile material for a nuclear bomb, if it chose to, to at least a year from around two to three months. Most experts say that time is now less than before the deal; though Iran says it only wants to master nuclear technology for civil uses.

"The most important issue for us is to reach a point where, firstly, Iranian oil can be sold easily and without hindrance," Iranian media quoted Foreign Minister Hossein Amirabdollahian as saying.

Iran insists all US sanctions must be lifted before steps are taken on the nuclear side, while Western negotiators say nuclear and sanctions steps must be balanced.

US sanctions have slashed Iran's oil exports, its main revenue source. Tehran does not disclose data, but assessments based on shipping and other sources suggest a fall from about 2.8 million barrels per day (bpd) in 2018 to as low as 200,000 bpd.

Mora said he decided to reconvene the talks during many officials' holidays between Christmas and the New Year so as not to lose time, but he added that talks would stop for three days as of Friday "because the facilities will not be available", referring to the luxury hotel hosting most meetings.

When the seventh round wrapped up, incorporating some Iranian demands, negotiators from France, Britain and Germany said in a statement: "This only takes us back nearer to where the talks stood in June", when the previous round ended.

"We are rapidly reaching the end of the road for this negotiation," they added.

 

What could be likely quantum of Iranian oil exports even if United States eases sanctions?

According to some of the analysts, one of the reasons for lingering imposition of sanctions on Iran by the United States is pressure of large oil producers from the Middle East. Thanks to Israel which has drilled into their minds, “Iran is a bigger threat as compared to Israel”.

As Joe Biden seems adamant at joining the Joint Comprehensive Plan of Action (JCPOA), anti Iran elements have once again started talking about adverse impacts of re-entry of Iran in oil trade.

Fitch Solutions, a subsidiary of Fitch Ratings, which is one of three biggest credit rating agencies of United States, has forecasted a 6.8% growth in Iranian oil exports in 2021 if the US comes back to the 2015 nuclear deal.

In one of its latest reports dubbed “Iran Oil and Gas Report”, Fitch has stated that crude oil exports of Iran would double in 2022 compared to 2020.

“The prospects for the Iranian oil sector have brightened significantly following Joe Biden's victory in the US presidential election, He has indicated re-entry of the US into the Iranian nuclear deal, paving the way for a roll-back of secondary sanctions and recovery of around 2.0 million barrels per day (bpd) in oil production,” the report said.

Fitch also stated that Iranian gas production is also expected to rise in the coming years considering the new developments in the country’s giant South Pars gas field that Iran shares with Qatar in the Persian Gulf.

“However, Iran needs to find new export markets in neighboring countries to maximize the productivity of the new output capacities,” the report reads.

Fitch further mentioned development of the Iranian oil and gas industry’s downstream sectors saying, “The outlook on the downstream is relatively robust, with the National Iranian Oil Company (NIOC) making continued investments to expand and upgrade its refined fuels production, and with a robust demand outlook for both oil and gas as the market recovers from the combined effects of Covid-19 and US nuclear related sanctions.”

Also, the study of the risk index of the upstream sectors of the country’s oil and gas industry in this report shows that, given the huge oil and gas resources, these sectors are reasonable options for investment in the country.

According to the report, Iran ranks fourth among 12 countries in the region in terms of the oil and gas industry’s risk-return index, while the country occupies 20th place among the world’s top 72 oil-producing countries.

Iranian oil production and exports have been both increasing over the past few months despite the US sanctions. Iranian Oil Ministry has announced its readiness for boosting the country’s crude oil output to the pre-sanction levels in case of the US rejoining JCPOA.

Back in January this year, the data from SVB International and two other firms indicated that Iranian oil exports were climbing in January after a boost in the fourth quarter despite US sanctions.

Iran’s Deputy Oil Minister Amir Hossein Zamaninia had said earlier that the country started boosting its oil production and would be able to reach pre-sanction levels within two months.

Iranian oil won’t create any surplus in the oil market and the market will be able to accommodate the country’s maximum oil output of around 3.9 million to four million barrels a day, Bloomberg quoted Zamaninia as saying on the sidelines of the Iran Oil Show in Tehran in late January.