US seizure of Iranian ships’ oil cargo
put spanner in works as US delegation
comes under increasing domestic pressure

David Hearst / Middle East Eye

(March 11, 2022) — Talks in Vienna aimed at restoring the 2015 nuclear deal with Iran have been put on hold after the US announced it had seized the oil cargo of two Iranian ships which it claimed were breaking sanctions.

A pause in the talks is needed, EU representative at the negotiations Josep Borrell Fontelles said, citing “external factors”. “A final text is essentially ready and on the table,” he said.

The Iranian delegation repeatedly warned Washington in indirect talks in the Austrian capital not to seize the cargos of the two Greek-managed ships in Houston and the Bahamas, just as the negotiations on removing most of the sanctions were coming to fruition.

Late on Thursday, however, the US released details of the seizure, whose cargo was worth $38m, which were contained in a federal case unsealed last month.

The cargo seizure is not the only obstacle remaining at the talks, which have now dragged on for 11 months.

In its latest reply to Iran, the US made new unspecified demands that surprised and angered the Iranian side.

The US is refusing to lift the designation of the Islamic Revolutionary Guard Corps (IRGC) as a foreign terrorist organisation; an issue between Iran and the International Atomic Energy Agency (IAEA) on the “possible military dimensions” of Iran’s activities has still to be resolved; and there remains the issue of removal from the sanctions list of other companies, businesses and individuals.

Last Friday, the Russian delegation to the talks demanded a sanctions waiver from the US if it were to continue to participate in the deal to resuscitate the 2015 JCPOA agreement.

‘Equal Rights’

Russian demands for sanctions waivers were also important for Iran, because of the suspicion that even after sanctions are lifted, European and US companies would be reluctant to enter the Iranian market. Iran’s only two reliable major investors would remain Russia and China.

Iran and Russia were to begin talks on Khatam-al Anbiya, an Iranian engineering firm controlled by the IRGC, as a way of solving the sanction waiver problem. Under the deal, Russia would receive Iran’s stock of uranium enriched to 60 percent and supply Iran’s nuclear programme with yellow cake, a uranium concentrate powder.

Russian Foreign Minister Sergei Lavrov spoke by phone with his Iranian counterpart Hossein Amir-Abdollahian on Monday, after which the Russian foreign ministry said: “It was underscored that the revival of the JCPOA must provide for all participants to have equal rights in relation to the unhindered development of cooperation in all areas without any discrimination.”

The Russian objection was not regarded as insuperable. Iran and Russia could continue to trade with each other if both the Russian state and the headquarters of Khatam-al Anbiya were sanctioned.

Much Better Deal

The US seizure of oil comes after reports emerged from Vienna that Iran was on the verge of securing a much better deal than the one negotiated by the-then reformist government in 2015.

Critics of the deal in the US seized on comments by Mikhail Ulyanov, the Russian ambassador to the talks, who said “Iran got much more than it could expect. Much more.”

Indeed, Iranian chief negotiator Dr Ali Bagheri Kani had secured key rights for Iran that his predecessor, the former foreign minister Javad Zarif, had failed to.

Middle East Eye understands that these include the right to disconnect, but not dismantle, the cascades of advanced centrifuges at three sites in Iran, which Tehran regarded as an “implicit guarantee” should the US renege on the deal, as it did under Donald Trump in 2018.

“In my opinion, even if the US Congress were to miraculously approve the deal, they could still reverse it within hours if they wanted to do so. Therefore, in case the US decides to violate or tear up the deal again, the existence of these highly advanced centrifuges are stronger guarantees than anything the US could possibly give,” an Iranian source said.

Iran is estimated to have over 3,300 advanced centrifuges, which are ten times more effective than the first generation of machines.

The exact number of advanced centrifuges, located across three sites, is a closely guarded secret. One is above ground at Natanz, and two are deep below ground, at the fuel enrichment plant at the same site, and Fordow Fuel Enrichment Plant.

‘Thorny Issues Remain’

Under the deal being finalised in Vienna, most of the sanctions that the US imposed when Trump pulled Washington out of the deal in 2018 would have been lifted.

Nearly all the people and companies targeted by Trump’s “maximum pressure” campaign would have been released from sanctions.

A system of verification would have been created whereby each side would be given set dates, by which time each side would have to fulfil their obligations.

Apart from discussions in Vienna, the peace package would have also included the return of Iran’s frozen funds from South Korea, Japan and Iraq, and a prisoner exchange.

Iran had been optimistic it would finally get a deal, and members of the Iranian delegation had gone as far as booking flights home last Saturday.

An Iranian delegate to the talks told MEE: “Ninety nine percent is already agreed, but that remaining one percent is of high quality.

“You may manage to agree on the balance of issues, but some thorny issues remain that require right decisions. No one can accuse Iran of being intransigent,” they added.

US ‘Capitulations’

The oil seizure is a clear sign of Biden’s vulnerability to the charge that his chief negotiator, Rob Malley, has given too much away in Vienna.

Malley came under bitter personal attack in a piece written by Gabriel Noronha, an ex-official of former US Secretary of State Mike Pompeo’s Iran Action Group, who devised Trump’s “maximum pressure” policy that is now being dismantled in Vienna.

Noronha accused Biden of letting Malley “continue to concede issue after issue in Vienna. Multiple career officials view these capitulations as so detrimental to US national security that they contacted me requesting that I rapidly share details of these concessions with Congress and the public in an effort to stop them.”

What followed was a detailed list of the concessions, and the Iranians who would be released from sanctions, in an attempt to muster opposition in Congress.

It is unclear now whether the talks are salvageable. Biden is under pressure not to be seen to be going cap in hand for Iran’s oil, now that potentially the US decision to ban Russian oil imports removes more than 10m barrels a day from western markets.

An Iranian source said: “We are now treading water.”

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