Generic Hero BannerGeneric Hero Banner
Latest Market News

Iran ‘begins producing’ 20pc enriched uranium at Fordow

  • Spanish Market: Crude oil
  • 04/01/21

Iran has restarted production of 20pc enriched uranium at its underground nuclear facility in Fordow, in a further breach of the nuclear deal that it signed with world powers in 2015.

The move, announced by government spokesman Ali Rabiei, takes Iran a step closer to possessing weapons-grade levels of uranium and could undermine the prospect of the US rejoining the nuclear deal after president-elect Joe Biden takes office later this month.

"The process of UF6 [uranium hexafluoride] gas injection began hours ago and within a few hours we will have our first 20pc enriched uranium product," Rabiei said. "These steps were taken after… informing the International Atomic Energy Agency [IAEA]."

Fordow is one of Iran's two uranium enrichment sites that were being regularly inspected by the IAEA under the terms of the nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA). The other is Natanz, where a massive fire broke out at a warehouse in July. Iran blamed the incident on "an act of sabotage".

Under the terms of the JCPOA, Iran committed to cap the enrichment of its uranium stockpile to 3.67pc and to limit its stockpile of enriched uranium to just 300kg. But Tehran began reducing its compliance in mid-2019 in protest at what it saw as a lack of support from the deal's European signatories following Washington's exit, which led to harsh US sanctions being reimposed.

By July 2019, the IAEA confirmed that Iran had crossed the 3.67pc limit, raising its enrichment to 4.5pc. IAEO spokesman Behrouz Kamalvandi said at that time that Iran was prepared to raise enrichment further to 20pc or more but would not do so until "the country needs" it.

This latest step is one of several measures included in a law passed by Iran's majority-conservative parliament last month in response to the assassination of Mohsen Fakhrizadeh — widely considered to be Iran's leading nuclear scientist. Iranian officials have said that Tehran holds the US and Israel responsible for Fakhrizadeh's death and have warned that his killing "will not remain unanswered".

US president-elect Joe Biden's team views Iran's action as an attempt to build leverage ahead of soon-to-resume talks with Washington on restoring the full functioning of the JCPOA. But it may end up doing the opposite and actually delay relief of US sanctions.

The Biden team says it expects Iran to return to compliance with restrictions on its nuclear programme before the incoming administration dismantles the vast array of financial and sectoral penalties imposed under President Donald Trump. Iran, however, expects Washington to lift sanctions before it reverses its own non-compliance.

Considerable departure

Meanwhile, the EU has described today's news as a "considerable departure from Iran's commitments under the JCPOA". The bloc — along with the other remaining JCPOA signatories the UK, France, Germany, China and Russia — is awaiting a briefing from the IAEA about the developments.

Should the move be confirmed by the IAEA, it could lead to the formal reimposition of EU sanctions on Iran, including those targeting crude exports, albeit only after following procedures under the nuclear deal's dispute resolution mechanism. In practice though, EU member states have not been importing any crude or oil products from Iran since the US reintroduced sanctions in 2018 and would not resume doing so until the threat of such extraterritorial sanctions are lifted.


Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more