Senate critics railed today against the nuclear deal the US and its P5+1 negotiating partners reached with Iran that swaps nuclear concessions for oil sanctions relief.
"You have been fleeced," Senate Foreign Relations Committee chairman Bob Corker (R-Tennessee) told US secretary of state John Kerry, energy secretary Ernest Moniz and treasury secretary Jack Lew appearing before his panel today.
"You guys have been bamboozled," said senator Jim Risch (R-Idaho).
Corker described as "hyperbole" the argument "it's either this deal or war." And with the White House warning that the international sanctions regime will unravel if Congress forces the US to withdraw from the agreement, Corker said the US administration has turned "Iran from being a pariah to now Congress being a pariah."
But Kerry dismissed as "some sort of unicorn arrangement" the notion the US and its negotiating partners the UK, France, Germany, Russia and China can somehow negotiate a better deal with Iran that "involves Iran's complete capitulation." That, Kerry said "is a fantasy plain and simple."
Kerry said that "whether we like it or not, Iran has developed experience with a nuclear fuel cycle." And pointing to the nuclear armed powers that helped the US negotiate the deal, Kerry said "they are not dumb." Kerry said he expects Saudi Arabia will support the deal, if certain unspecified things happen.
California senator Barbara Boxer (D) told the negotiators that "if you were bamboozled, the world was bamboozled."
During the nuclear talks, Iran's oil exports were limited to 1mn-1.1mn b/d, down from 2.5mn b/d before the sanctions were imposed. Iran produced 2.85mn b/d in June, tied with the UAE as Opec's third largest oil producer.
Iranian oil minister Bijan Namdar Zanganeh has said that with the lifting of sanctions his country will be able to ramp up production quickly. Iran can add 500,000 b/d to output within a month and then another 500,000 b/d within six to seven months after that. Many analysts expect Iran will need until the end of 2016 to increase production by another 300,000-500,000 b/d.
Iran may tap an estimated 40mn bl of crude and condensate it is believed to be holding in floating storage. But it will struggle to boost output from idled fields.
Lew tried to dispel suggestions that sanctions will be lifted as soon as deal goes into effect. "Iran will not receive any new relief until it fulfills all of the key nuclear-related commitments specified in the deal," Lew said.
Sanctions have cost the Iran more than $160bn in oil revenue alone since 2012, Lew said. US officials estimate Iran will have access to only about $50bn of reserves held abroad.
Lew said that if a company invests in Iran after the sanctions are lifted and Tehran cheats on the terms, that business will then have to abide by sanctions if the sanctions measures "snap back."
Congress has until 17 September to review the agreement and vote on a resolution of disapproval. With Republicans in control of both houses of Congress, that resolution is likely to pass. Obama can then veto that measure and will need to retain the support of 34 senators or a third of the US House of Representatives to sustain that veto. Democrats hold 44 seats in the Senate and enjoy the support of two independents, so sustaining a veto appears likely.
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