By Tim Marshall.

The What is fairly straightforward.  According to the International Atomic Energy Agency Iran has met the its initial commitments to the Joint Comprehensive Plan of Action agreed with the great powers last year.  It has, for example, Nuke symbolIran flagremoved the core of the Arak reactor and filled in the space with concrete so it cannot be used again. Now we wait to see if it will honour its promises to abide by what appears to be a rather weak inspections regime.

In return the EU will no longer embargo Iranian crude oil imports and the United States will no longer seek to prosecute any foreign companies which do business in Iran, thus opening up investment and trade opportunities. (Other US sanctions remain in place).

Anticipating this the European and others have been constant visitors in Tehran since last summer and billions of dollars’ worth of deals have already been agreed which can now go ahead. The now ubiquitous international SWIFT payment system, from which Iran had been excluded, can now be used for transactions.

Iran will now go on a spending spree, renewing its ageing fleet of civilian airplanes, and bringing its decrepit oil industry up to date. Tehran says that within weeks it will rise its oil production by 500,000 barrels per day (bpd). It hopes to double that by the end of the year.

Doubling production seems ambitious, but it likely that by the spring Iran can have its extra 500,000 bpd on the market. This is likely to ensure that the oil price remains low, probably below $40, for the rest of the year.

Despite these low prices, the fact is that Iran will be back in the market, investment will flood in, and assets frozen around the world will be released. This should allow Iran to increase its spending at home albiet in a limited way, and also fund its power and proxy wars abroad. For example, Iran is thought to have several tens of millions of barrels of oil in storage which it can now sell. Several European countries including the UK and Germany will be willing customers.

The Why is also uncomplicated.  An Iran possessing nuclear weapons was unacceptable to many countries. There was a danger of the Israelis attacking Iran to prevent it crossing the threshold, and if it did, of there being a nucler arms race in the Middle East. (Something which may still happen). President Obama wanted a signature foreign policy success, and his public pronouncements suggest he believes he has achieved it.

Theoretically, tensions between Iran and Western powers will now diminish. The swift resolution of the potential crisis when several US navy personnel were arrested in the Gulf last week shows how keen both sides are not to upset the deal.

The US has subsequently imposed a new round of sanctions against 11 entities and individuals but this was due to Iran testing ballistic missiles in defiance of a UN Resolution not to so do.  These limited sanctions are unlikely to unravel the main deal.

Nevertheless, the future of the agreement, and the region remain uncertain.

The Arab states, the Turks, and the Israelis are all skeptical about Iran’s commitment to honour the deal. They are scathing about the arrangements for inspecting Iran’s nuclear facilities, and some are looking at the feasibility of building their own nuclear weapons if they suspect Iran is cheating.

The deal has done nothing to lessen the tensions between Iran and the Gulf states, especially Saudi Arabia. The conflicts in Yemen, Syria, and Iraq, which are to a degree proxy wars, have no end in sight.

Iran is not about to abandon President Assad in Damascus nor stop funding Hezbollah in Beruit. It will continue to grow its power in Iraq where Shia militia it is helping to fund and train are beginning to take the shape of an alternative armed force to the Iraqi army and it will now have more money to do this.

That said, if the deal does prove to have stopped Iran from building nuclear weapons, and thus prevent a nuclear arms race in the Middle East, it will be judged a major success. There is a long way to go before that assertion can be made.opinonsm2

 

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5 Comments on "The What And The Why Of The Iran Deal"

  1. Tim, is there an element of delivering a bit of a slap down to Israel and Saudi Arabia into the bargain here as well?, a reminder that to retain influence over US policy you need to behave yourselves.

    • mahatmacoatmabag | 17th January 2016 at 9:01 pm | Reply

      Rob, both Israel & Saudi Arabia are sovereign nations, not vassal states, to be slapped down & having a nuclear armed Iran which this ill advised & dangerous treaty virtually guarantees does not constitute a reminder to behave yourselves but the opposite it is a reason to fundamentally distrust America under Obama & his anointed successor Hillary Clinton, if God forbid, she is elected President. Who will ever trust the USA ever again after Obama’s failed presidency?

    • Seeing this as a slapdown of Israel and Saudi Arabia (a tactical maneouver by a dominant Western power to put those pesky upstart Easterners in their place) is a shortsighted way to see this. It is a strategic move; part of Obama’s and the liberal West’s strategy of alignment with rising Islamification.

      • mahatmacoatmabag | 18th January 2016 at 11:02 am | Reply

        Hi Rafi, the liberal West’s strategy of alignment with rising Islamification is with Sunni Islamic regimes in the Mid-East & the appeasement of radical Sunni Islam at home in the West. Obama’s alignment on the other hand also includes the above & appeasement towards radical Shia Islam in the form of Iran by giving in to Iran over the nuclear deal & the removal of most trade sanctions. We are yet to see the full extent of large quantities of Iranian oil being sold in the already oversupplied & volatile oil markets with oil likely to fall bellow $30 a barrel as a result, add to that the release of Irans $150 billion in frozen assets in the West for which countries worldwide are scrambling for a piece of the action irrespective of whether the revenue that Iran gets from oil will go into trade & reconstruction projects or be funneled into its aggressive proxy war on its neighbours & into further missile production.

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