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The Maastricht Diplomat

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Iran, the new energy supplier?

Writing a Sunday summary is always a challenge; keeping up with the news throughout the week and then sitting down and deciding which news I should deliver to you is a feat. This week has been a roller coaster, between the ongoing Russian aggression on Ukraine, the increase of fuel prices, a new low rate for the euro against the dollar, and the conflicts in Yemen, Artsakh and many other countries. But the news I have been following most keenly is the negotiations taking place in Vienna. So, dear reader, this Sunday Summary’s theme is the Iran Nuclear Deal, also known as the Joint Comprehensive Plan of Action or JCPOA.

Let’s start from Monday the 7th of March: the first news I saw was of Israel bombing “a weapons and ammunition depot operated by Iran-backed militias near the Damascus International Airport” as reported by UK-Based Syrian Observatory for Human Rights. This was hours after Israel’s prime minister Naftali Bennett and Russian president Vladimir Putin met in Moscow. That got me down a rabbit hole of researching Iran – Russia – United States – Israel relations amid the Russian aggression on Ukraine.

Now, Syria has been witnessing Israeli airstrikes for years. So why is it any different now?

On Tuesday March 8th , the U.S. President, Joe Biden, signed an Executive Order “to ban the import of Russian oil, liquefied natural gas, and coal to the United States.” According to the White House statement, this decision was made in agreement with the U.S.’s Allies in an attempt to “reduce [the] collective dependence on Russian energy and keep the pressure mounting on Putin…” This was followed by the European Union taking a less immediate approach, declaring their plan to “diversify” their energy supply going into 2030, after an “informal” meeting at Versailles spanning the 10th and 11th.

But what’s the alternative you ask? – good question. Here’s the back story:

Last month, the U.S. lifted the sanctions on Iran’s civil nuclear program in an attempt to revive the 2015 Iran nuclear deal, which the U.S. unilaterally withdrew from in 2018.

Following the Russian invasion of Ukraine, oil prices have hit new highs (reaching over 100$ a barrel). This presents an opportunity for Iran – a major oil and natural gas provider – to take advantage of the Western sanctions on Russia to offer its services as an alternative to the Russian supply. Iran’s President, Ebrahim Raisi, stated that the country has the capacity to supply natural gas to international markets, that includes Asia and Europe.

But what does this have to do with Israel?

The U.S.’s withdrawal from this deal in 2018 was considered a geopolitical triumph for former Israeli prime minister Benjamin Natanyahu. Iran’s natural gas exports were reduced, especially to Turkey and Iraq, because of the lack of investment in energy infrastructure and the decrease in demand for domestic needs due to the reimposition of U.S. sanctions.

The Vienna negotiations resumed the discussion on the Iran nuclear programme, the reimposition of the deal could ultimately act as a catalyst for the growth of Iran’s influence in the region. Not just economically, but also in terms of its nuclear power since Iran could potentially have “functional nuclear weapons in two years” and the revived nuclear deal would still lift uranium enrichment caps on Iran by 2025. This, undoubtedly, raised Israeli concerns over the stability of its future in the region.

Considering this, Monday’s missile attack makes more sense now, no? You see, Israel has condemned the Russian aggression on Ukraine, siding with their traditional U.S. ally in this war. However, Russia would still give the freedom to Israel to hinder Iranian activity in the region. For as the saying goes: the enemy of my enemy is my friend.

Where does Russia stand in this?

The negotiations in Vienna are held between Iran and the P5 + 1 (the 5 permanent members of the United Nations Security Council: China, France, Russia, the United Kingdom, the U.S. + Germany) and the E.U. – with the United States participating indirectly.

This means that Russia could veto this deal altogether. In light of the wave of western sanctions on Russia, following its invasion of Ukraine, Russia wants to secure sanctions-free trade with Iran. Russia’s foreign minister requested a guarantee written into the JCPOA that the current sanctions will not hinder Russia’s rights to “free, fully fledged trade and economic and investment cooperation and military-technical cooperation with Iran”. This threatens to torpedo the negotiations.

Don’t forget, if the Iran nuclear deal was to go through, Russia could lose its place as the major oil and gas provider for the West and possibly ease fuel prices. The current soaring fuel prices play in favor of Russia since it will both increase the country’s revenue and take a toll on the Western economies – a subtle payback for the Western sanctions.

What’s the current status of the negotiations?

On Friday 11th the negotiations in Vienna came to a halt. The E.U. Foreign Policy chief Josep Borrell tweeted that this halt is needed and is due to “external factors”.

He continued “As coordinator, I will, with my team, continue to be in touch with all JCPOA participants and the U.S. to overcome the current situation and to close the agreement.” It is very important to mention that the pause in the Vienna negotiations came after the rising tensions between Russia and the U.S. And it is now up to the United States to “overcome the current situation, ” as Borrell tweeted.

Iran is, of course, determined to reach a successful conclusion which would play a pivotal role in its economic and geopolitical power. Iran’s Foreign Ministry spokesman Saeed Khatibzadeh tweeted “… No external factor will affect our joint will to go forward for a collective agreement.”

So, dear reader, the conclusion for this week is: Iran came really close to closing its nuclear deal. But as Russian – U.S. tensions rise, its hopes for the speedy conclusion have been paused. Will the Iran Nuclear deal get through eventually? Will the West replace its Russian suppliers? Will we witness a change in these power dynamics in the near future?

We’ll have to wait and see…


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