Iran Response Keeps Door Open For Deal

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Iran has delivered a formal response to the EU's proposed "final text" of a new nuclear deal, with the country's foreign minister saying it could lead to an agreement in the coming days.

However, Foreign Minister Hossein Amir Abdollahian indicated that Iran’s response – which was delivered early on Tuesday after it had been debated by the Supreme National Security Council -- would not be Tehran's final word, and that Iran still expected the US to make further compromises, according to Iranian media reports.

In Washington, State Department spokesman Ned Price gave no indication that Iran and the US were any closer to resolving their differences.

"The issues that the Iranians have put on the table are clearly extraneous to the four corners of the JCPOA," Price told reporters during a press briefing, referring to the earlier Iran nuclear deal agreed in 2015.

EU foreign policy chief Josep Borrell announced his proposed final text on Aug. 8 and said that Tehran and Washington must either accept or reject it.

Borrell — who has coordinated indirect negotiations between the US and Iran in Vienna — had set Aug. 15 as an unofficial deadline for the two countries to respond.

Flexibility Needed

"If the American response is realistic and flexible, an agreement will be reached, and if the US does not show flexibility, we should talk more," Amir Abdollahian was quoted as saying by Iranian media on Monday, before Tehran submitted its written response.

Amir Abdollahian said there were still three outstanding issues to be addressed, indicating that the US side had shown flexibility "verbally" on two of them, but that Iran needed this to be put in writing.

He added that Washington also needed to show more flexibility on the third issue, namely guarantees relating to sanctions relief if an agreement is reached.

"If America shows flexibility, we will reach an agreement in the coming days," he said.

Price reiterated the Biden administration's position that diplomacy remains the most effective tool for constraining Iran's nuclear program.

However, he added that if Iran does not accept a mutual return to compliance with the terms of the earlier nuclear deal, the US will continue to vigorously enforce sanctions and apply other types of diplomatic pressure.

EU Mediation Effort

The EU has tried to broker a revival of the 2015 nuclear deal that is formally known as the Joint Comprehensive Plan of Action (JCPOA).

That agreement imposed strict curbs on Iran's nuclear program in return for the lifting of international sanctions.

The US withdrew from the agreement under former President Donald Trump in 2018 and the US then unilaterally reimposed sanctions on Iran, with other countries keeping their distance from Iran for fear of being punished by Washington.

High energy prices and a severe gas shortage in Europe — with an embargo on Russian crude imports set to start in December — have prompted the EU to try to nail down a new deal after more than a year of negotiations in Vienna.

Under its "breakthrough" scenario, which envisages a revival of the 2015 agreement and a lifting of restrictions on Iran's oil exports, Energy Intelligence's Research & Advisory unit sees Iranian exports rising to around 2 million b/d by June 2023.

With US sanctions currently scaring most countries away from Iranian oil, analysts estimates of Iran's current exports range from 600,000 b/d to 900,000 b/d, most of which is believed to go to China.

While it remains unclear whether an agreement may yet be reached to revive the JCPOA, some oil traders believe that tight oil supplies and high prices will encourage the US to compromise to push a deal over the line.

"The world needs additional molecules, so it will happen," said one veteran London-based crude trader, who noted that, without additional oil supplies, Europe faced "a very harsh winter."

"The Russian [oil] flows will be redirected, so the Russians are no longer concerned about Iran’s return [to the market]. Plus … Opec is maxed out on production bar Saudi [Arabia] and the United Arab Emirates."

"Now is the time for Iran to come back," the trader added.

Nuclear Policy, Sanctions, Opec-Plus Supply , Oil Demand, Oil Supply
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