World powers convene on Iran sanctions after hardliner wins power

By Jonathan Tirone and Arsalan Shahla on 6/20/2021
Iran
Iran's newly-elected President Ebrahim Raisi

(Bloomberg) - World powers met on Sunday in Vienna in their first attempt to revive a nuclear deal with Iran since the Islamic Republic’s election of a new hardline president.

While Ebrahim Raisi’s win isn’t expected to derail efforts to return the U.S. to the accord, the change in administration in Tehran has complicated diplomacy. The Persian Gulf nation’s president-elect is himself subject to sanctions imposed by the U.S. in 2019, and Iran insists they must be removed as part of an agreement to revive the pact.

The Joint Commission of the 2015 deal reconvened for talks at around 2.45 p.m. local time on Sunday, according to a statement from Iran’s lead negotiator, Abbas Araghchi, on his official Telegram channel.

Related story: Iran’s election results will likely slow a return to global oil markets

Earlier, Araghchi signaled that no breakthrough was imminent in what marks the sixth round of talks since negotiations began two months ago. Diplomats will return to their capitals for additional consultations, and clear differences remain that will require yet another round of talks, Araghchi said.

Failure to clinch a deal this week means that focus shifts to June 24. That’s when a temporary monitoring pact expires with International Atomic Energy Agency inspectors. Iran said last week it was open to prolonging that side agreement as long as progress continued to reviving the broader deal.

The talks aim to bring the U.S. back to the 2015 pact after former President Donald Trump withdrew from it three years later. A resuscitated accord would lift sanctions on Iran’s struggling economy and allow it to return to global oil markets, in return for limiting its contentious nuclear work.

Sanctions on Iran’s energy sector and a U.S. ban on purchases of its oil have cost its economy more than $100 billion in the three years since Washington withdrew from the agreement, the Islamic Republic’s Oil Minister, Bijan Namdar Zanganeh, said on Sunday.

Negotiators had originally sought to seal a deal before Friday’s election but now want to ensure work is concluded before outgoing President Hassan Rouhani hands over power to Raisi in August. The feud over the agreement, which includes China, France, Germany, Russia and the U.K. as well as the U.S., has pushed the region close to war and Tehran to enrich uranium near the level required for a bomb.

“The election of a hardliner delays the expectation of a rapid return of Iranian oil to the market,” Sara Vakhshouri, president of SVB Energy International LLC, said Sunday at the daily energy forum hosted by the Dubai-based consultancy Gulf Intelligence.

Ultraconservative judiciary chief Raisi, who’s hostile toward the West, has said he would preserve the nuclear deal that Rouhani helped seal and has suggested he doesn’t want to make it Iran’s central foreign policy concern. In comments on Saturday after results showed him on course to win the election, he suggested he would work for continuity with Rouhani’s team.

Iran’s policy toward the agreement is ultimately decided by Supreme Leader Ayatollah Ali Khamenei. Raisi -- who was sanctioned in 2019 by the Trump administration over his role in a deadly 2009 crackdown on protesters alleging vote fraud -- is seen as a favorite to eventually succeed him.

Naftali Bennett, sworn in as Israel’s prime minister a week ago, said Raisi’s election was “a sign for world powers to wake up,” and understand “what kind of regime they are chosing to strengthen” by considering a return to the nuclear agreement.

“He is a man notorious among the Iranian people and around the world for his role in death committees that have executed opponents of the regime,” Bennett said in a statement.

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