Tehran should take the deal on the table

Tehran should take the deal on the table

Politico – Aug 19th 2022

There are many reasons why Iranian officials have been hesitant about whether to accept a new European Union proposal for reviving the 2015 Joint Comprehensive Plan of Action (JCPOA).

The dominant political faction in Iran is full of officials who opposed the plan and saw their views vindicated when the United States withdrew from the deal in 2018 — while Iran was in full compliance. And they are understandably wary of trusting the promises of another U.S. administration.

Given that the relief from sanctions that the deal provides relies on executive orders rather than a Senate-approved treaty, there are few guarantees that President Joe Biden’s team can offer that a future U.S. president couldn’t reverse. However, that doesn’t mean Tehran should turn away from this opportunity, as a revived JCPOA would provide important benefits to the country, even if of short duration.

Through a revised deal, Iran would gain access to an estimated $100 billion in hard currency reserves, which are currently frozen in foreign banks, and it would be able to rapidly increase energy exports at a time when the world is in dire need of them.

According to Bijan Khajehpour, a veteran analyst of the Iranian economy, the country’s exports of crude oil and condensate could reach nearly 3 million barrels a day — twice what they are now — boosting government revenues by $65 billion annually at current prices.

Ordinary Iranians would see an immediate impact from this in terms of a stronger national currency and reduced inflation, while the country would be able to replenish its rainy day National Development Fund and renovate aging infrastructure.

Such sanctions relief would also facilitate more regional trade and investment, meeting the current Iranian administration’s goal of focusing on the neighborhood. By contrast, without a revived deal, the Biden administration is likely to increase efforts to enforce secondary sanctions on Iran, going after oil smugglers and middlemen in countries like the United Arab Emirates.

Regional tensions would also likely rise in tandem with the country’s nuclear program, which, in terms of Iran’s ability to rapidly produce enough fissile material for a nuclear weapon, is now essentially at the point of breakout. Israel has already carried out assassinations of multiple Iranian scientists and sabotaged facilities; and on a recent trip to Israel, Biden threatened the use of military force as a last resort to prevent Iran from building a nuclear bomb.