In Tehran, oil revenue is more important than ideology right now

Remarkable developments are shaping the relationship between energy and ideology in Iran. The intersection between these two dynamics lies in the talks in Vienna aimed at reviving the 2015 nuclear deal between Iran and major world powers, which would result in the lifting of sanctions.

Negotiations, which the parties hoped to conclude with an agreement by the end of May, have stalled. But despite the standoff, believed to be caused by Tehran’s insistence on removing its Islamic Revolutionary Guard Corps from the US list of designated terrorist organizations, they remain alive.

Indeed, the need for Iranian oil to offset the fallout from a new EU embargo on Russian oil became a key consideration for all players in the Vienna talks, including Russia, after the war in Ukraine has changed the rules of the game. The US administration needs fuel prices at a level that avoids backlash from US voters ahead of the midterm elections in November, as many Americans see their government as fuel pump.

European governments desperately need Iranian oil and are pressuring Washington to make concessions, reminding Americans that Europe has heeded their call to ban Russian oil and, soon, gas as well.

China, in particular, will benefit from an agreement in Vienna, in terms of the flow of Iranian oil.

As for Iran itself, it appears ready for interim arrangements that lift sanctions and allow it to sell its oil to save its economy and calm its streets, where protests have raged in recent days. He thus hinted that he may be willing to postpone a decision on his request for delisting from the IRGC as part of a phased deal that prioritizes oil exports and the economy, but does not completely abandon the heart. of the regime’s ideology and the IRGC’s central position in it.

In such a scenario, Iran would not back down from its demands, but might show some understanding of US President Joe Biden’s situation in Congress regarding Washington’s designation of the IRGC (something Mr. Biden has spoken about). even more difficult to go back since he recently promised Israeli Prime Minister Naftali Bennett that this would not change). For this reason, there have been hints of Iran’s consent to placing contentious issues in a separate basket to be discussed at a later stage, while a basket of priority issues is now agreed. These could include the Biden administration’s commitment to completely lift sanctions on Iranian oil sales, financial institutions and the Iranian Central Bank, in exchange for Iran freezing uranium enrichment, and perhaps to comply with US insistence on better oversight mechanisms directed by the International Atomic Energy Agency for Iran’s nuclear program.

European governments desperately need Iranian oil and pressure Washington to make concessions

Seyed Hossein Mousavian, a security and nuclear policy expert at Princeton University who promoted some of these ideas, wrote that after a year of negotiations, “there is agreement on the choreography of how the Iran and the United States would “go nuclear,” arguing that the circumstances arising from the U.S. November elections necessitate understanding the existence of temporary obstacles. Therefore, “an interim agreement could still salvage the agreement and potentially provide the basis for full compliance by both parties after the [US elections]”. In Mr. Mousavian’s opinion, in the absence of the possibility of a full revival of the 2015 nuclear agreement, an interim agreement would be a better option than war, citing the long-lasting shadow war for years between Israel, the United States and Iran on land, at sea and in cyberspace.

Perhaps the tone and substance of US Iran envoy Robert Malley’s testimony before the Senate Foreign Affairs Committee two weeks ago was a wake-up call for Iranian policymakers to come up with new ideas. . Mr Malley said there were big question marks around whether the nuclear deal could be revived, adding that the chances of success in Vienna were lower than the chances of failure.

Mr Malley does not usually speak in pessimistic language and has persisted in his aim to make the talks in Vienna a success. His remarks may have alerted Iranians to the possibility of the talks failing without a result – that is, without lifting sanctions on Iran, bringing some economic and political ruin to Tehran.

From an economic and financial point of view, any agreement in Vienna will benefit Iran. Oil revenues are currently more important than ideology, which Iranian leaders may decide to put on the back burner until Iran recovers economically, before reviving its ideology and regional instruments and commitments with greater momentum. later.

Iran could therefore agree to relax its demand for delisting from the IRGC and even curb the direct regional activities of its proxies, such as Hezbollah in Lebanon. However, that would be a temporary gesture of good faith, not the kind of permanent assurances sought by the Biden administration and European governments regarding Iran’s regional behavior. Iran has refused to provide such guarantees, but perhaps could improve its behavior temporarily and de facto to reassure its counterparts.

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Tehran would rely on European pressure to push the Biden administration to agree to such an interim deal, based on its potential to offset Russian oil supplies to Europe at a better price. The equation is simple: a rapid and enormous financial windfall for Iran thanks to oil sales to Europe at a lower price; immediate European access to an alternative to Russian oil; a boost for the Biden administration thanks to the reduction in oil prices; and a boost for China through the lifting of sanctions against Iranian oil and financial institutions.

But what about Russia? It could lose financially and economically if Iranian oil starts flowing in places where Russian crude was previously king. Interestingly, however, Russia doesn’t seem to object. His endorsement of a West Iranian deal, despite its costs to Russia, will restore President Vladimir Putin’s status as an international player and break Russia’s isolation. If the talks succeed, Mr. Putin could say that had he not facilitated the talks, their failure would have been inevitable. He could then use this breakthrough as a starting point not only to regain Moscow’s role as a serious diplomatic power, but also to reinvigorate the strength of a three-way alliance with China and Iran that could serve as a kind of strategic consolation prize after failures in Ukraine. . Another consolation prize is that freeing Iran from sanctions and giving it a windfall from oil sales would allow it to pay Russia for possible bilateral deals, such as arms sales.

Iran may pursue a “pocketed” approach to salvage the Vienna talks. In other words, he could secure an economic victory by returning to the oil markets, then cross other bridges when he does. All the while, however, Tehran will be smiling.

Posted: 05 Jun 2022, 02:00 PM

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