Since talks began nearly a year ago, a more radical leadership has taken power in Tehran and a flurry of shipping and drone attacks have rocked the Persian Gulf. More recently, Moscow’s invasion of Ukraine has pushed up oil prices.
It has been given additional urgency to efforts to revive the deal between Tehran and world powers as it could release millions of barrels of Iranian crude to global markets within months.
Here’s a snapshot of what else it can bring:
Oil
Under the agreement, the US will waive sanctions on the purchase of Iranian oil. Trump suspended exemptions altogether in 2019, effectively reviving sanctions on all countries trying to import Iranian crude. Like the original deal, the reinstated agreement is not expected to lift a historic ban on US imports of Iranian oil, but means countries will be able to buy it without fear of being hit by secondary sanctions. It could take about two months for Iran to agree on a deal to start selling oil in international markets.
Before Trump’s sanctions, Iran’s main customers were China, India, South Korea, Japan, Turkey, Taiwan, Italy and Greece. Those Asian countries could be among the first to recharge on Iranian supplies.
Iran has tens of millions of barrels of oil stored in tankers so it can quickly ship to customers. Meanwhile, it will ramp up production from areas that have been completely or partially closed.
Iran, formerly OPEC’s No. 2 producer, could restore nearly one million barrels of daily crude oil production within months of a deal, according to traders and analysts. It could return to full capacity by next year, about 3.7 million barrels per day.
banking
The Trump administration’s sanctions on Iran’s banking system outweigh the penalties that preceded the 2015 deal. Most of Iran’s private and state-owned banks were subject to an additional layer of penalties related to terrorism and missile activity. The US also imposed terrorism sanctions on Iran’s central bank in 2019 after linking Tehran to an attack on a major Saudi oil complex.
The sanctions also made the purchase of humanitarian goods – which are legally exempt from restrictions – very difficult. Iranians have also struggled with remittances, while billions of dollars paid for oil sales are stuck in foreign accounts.
Under a revived deal, those funds are expected to be released soon. Iran will regain access to the SWIFT international messaging system for banks. Theoretically, it should be able to resume non-humanitarian trade. But there are still a slew of sanctions related to human rights and Iran’s ballistic missile program, which still apply to many entities and are not covered by the nuclear deal.
nuclear
Iran made significant progress with its nuclear program after the US reimposed and tightened sanctions, Tehran came closer to producing the fuel needed for a nuclear weapon. Under the revived deal, Iran is expected to limit its level of uranium enrichment to 3.67%, the level needed for nuclear power generation.
Iran’s stockpile of enriched uranium close to weapons-grade levels will be moved out of the country and advanced centrifuges set up for uranium processing will be dismantled. Iran has also agreed to resolve a controversial investigation into historic nuclear activity with the International Atomic Energy Agency by the end of May – a sign that a deal to ease sanctions could be fully implemented by the summer. Is.
regional stability
A key difference between this round of talks and the 2015 talks is that Iran has made efforts to involve its regional neighbors, Saudi Arabia and, more significantly, working to improve relations with the United Arab Emirates. Tehran is an important business partner. Several attacks this year, including those claimed by Iranian-backed Houthi fighters in the United Arab Emirates and Yemen, threatened this diplomacy, but it does not appear to have been derailed.
Saudi Arabia and the UAE backed Trump’s “maximum pressure” campaign against Iran. The Iran-US standoff culminated in attacks on oil shipments, an attack on a Saudi oil facility, and the US assassination of Iran’s most powerful general. Diplomats say a restored deal could reduce the chances of another escalation and help ease divisions in regional conflicts such as the war in Yemen.