Indirect US-Iranian talks are moving closer to a final stage after Washington and Tehran have responded to what the EU called a "final text" for a roadmap to lifting US sanctions against Iran's exports and curbing Iran's nuclear program.
The EU proposal does not appear to be final as both Iran and the US have identified issues to be resolved through additional negotiations before the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear deal can be restored.
President Joe Biden's administration today responded to the EU proposal and to Iran's response submitted last week. Tehran has received and will review the US response and submit comments to the EU, Iran's foreign ministry subsequently said.
The EU expects US-Iranian talks to resume in person soon, and in the same format they have been held since April 2021, under the EU's auspices and through mediation by JCPOA members France, Germany, the UK, Russia and China.
Washington and Iran have struck an optimistic tone since the EU presented its draft in late July, and each described actions the other side must take to resume compliance with the JCPOA as a forced concession. "We are closer now than we were even just a couple of weeks ago because Iran made the decision to make some concessions," the White House national security council said today.
But the outstanding issues remain hard to resolve because both Washington and Tehran have taken steps since former US president Donald Trump withdrew from the JCPOA in 2018 that make it difficult or impossible to fully restore the agreement in its original form. "We are not there yet and long gaps remain," the White House said.
The 2015 deal divided the vast body of US sanctions against into nuclear and non-nuclear buckets, lifting the former — targeting Iran's oil sales and its ability to do business with foreign banks and companies, while keeping in place the latter — sanctions against Iranian individuals and companies. The US measures imposed in 2018-20 have blurred the distinction between nuclear and non-nuclear sanctions. Tehran complains that "terror" designations against Islamic Revolutionary Guard Corps (IRGC) and other Iranian government organizations will prevent foreign companies from doing business with Iran. The US said last week that Tehran has dropped its demand for the removal of IRGC's "terror" label.
The nuclear part of the JCPOA is just as complicated as Tehran's nuclear program has moved beyond the scope that existed when the original deal was signed seven years ago. UN nuclear watchdog the IAEA is pressing Tehran to explain the origin of some nuclear materials discovered by UN inspectors. The original deal left the issue to be resolved outside of the JCPOA, but Washington wants Tehran to cooperate with the IAEA because its inspectors must verify Iran's compliance with the nuclear deal while Iran wants the UN agency to stop that particular investigation.
US-Iranian confrontation continues in other areas even though the two countries are pursuing a nuclear deal. The US military conducted air strikes in eastern Syria on 23 August against what the Pentagon described as "infrastructure facilities used by groups affiliated with Iran's Islamic Revolutionary Guard Corps" (IRGC). Biden ordered the strikes to retaliate against the 15 August attack on Syria-based US personnel by "Iran-backed groups," the Pentagon said. US nuclear diplomacy with Iran will continue despite the strikes, the White House said.
Iran's foreign ministry today condemned "an act of terror against popular groups fighting against occupation" in Syria, while denying links with those groups. The US military and allied Syrian Kurdish militia control parts of eastern Syria, including most of its oil fields, ostensibly to prevent attacks by the remnants of Islamist group Isis.
Argus estimates that Iran exported around 750,000 b/d over the past three months. A restoration of the deal in its original form could realistically add around 1.3mn b/d of Iranian crude to global supply within six to nine months of its implementation.
Iran's crude production has room to grow — Argus estimates it was 2.56mn b/d in July, compared with 3.81mn b/d in the first six months of 2018 — and it would be returning as an exporter at a time when supplies of competitor sour grades from Russia are in the process of being cut off from the EU and other advanced economies.