The Iran-US Nuclear Talks and its Strategic Repercussions

Rhea Abraham, Ph. D. Candidate, Jamia Millia Islamia University

The 2013 election of Hassan Rouhani as the President of Iran proved crucial in exploring latest negotiations on its nuclear program, especially after a rough period of detente with the international community mainly the United States. The meeting in Geneva on November 24, 2013 regarding Iran’s nuclear program between Iranian officials and representatives from the permanent members of the U.N Security Council and Germany (P5+1) reached a temporary relief with negotiations planned from January 20, 2014 onwards into the coming months. However, eager to pull itself out of the economic sanctions, Iran has welcomed the nuclear agreement to a large extent and has allowed inspectors from the UN to visit its Arak heavy water production plant as early as December itself. For the next six months therefore, the Iranians have agreed to halt any activity that could boost their ability to build a nuclear weapon and agreed to rigorous international inspections. In return, the U.S and its allies promise to support Iran financially and save its crippled economy from further sanctions.

THE JOINT NUCLEAR DEAL

According to official reports, Iranian nuclear facilities have been based mainly in 12 places which include the Arak heavy water plant with natural uranium reactor, Karaj nuclear plant for stockpiling and maintenance of enriching equipments and Yazd where an underground plant has been built next to a uranium extraction site.[1] The Bushehr plant operational in 2011 under IAEA inspections has produced a gross amount of 915 MWe net for power generation in 2013. The enrichment plants at Natanz, which were declared to the IAEA after its exposure by dissident groups in 2002, and renamed the Pilot Fuel Enrichment Plant (PFEP) and the underground Fuel Enrichment Plant (FEP), have been put under international safeguards. The FEP has been producing less than 5% enrichment while two centrifuges have been designated for production of Low Enriched Uranium (U-235) upto 20%, for the Tehran Research Reactor (TRR deals with Research & Development).[2] In 2010 however, the attack by the Stuxnet computer virus from the US affected Iranian companies involved with the control systems for the centrifuges installed at Natanz and Fordow leading to the decommissioning of around 1000 centrifuges. In June 2010, the Atomic Energy Organisation of Iran announced plans to further construct new research reactors for production of medical isotopes, in order to replace the TRR which finishes its operational life in 15 years.[3]

In the light of such information, the Geneva agreement put forward certain clauses in the agreement compelling Iran to halt all enrichment above 5% and dismantle the technical connections required to enrich above 5%. The agreement also enlisted Iran not to install additional centrifuges of any type to enrich uranium beyond the already existing 18,500 centrifuge; and not increase its stockpile of 3.5% low enriched uranium.[4] The agreement incorporated provisions for the International Atomic Energy Agency (IAEA) to be called upon for verification, facilitated by a Joint Commission to monitor implementation and resolution of various concerns, including the possible military dimension of Iran’s nuclear program.[5] Also, Iran will have to provide daily access to review surveillance and comprehensive inspection by IAEA inspectors at Natanz and Fordow, and among other provisions, provide long-sought design information for the Arak reactor (as Iran had earlier limited IAEA inspections).

During the first phase however, existing sanctions against Iran will still be in place, putting further pressure on the Iranian government, which include sanctions affecting petroleum product exports to Iran (resulting in loss of revenue), sanctions against the Central Bank of Iran and other major Iranian banks; secondary sanctions on banks that do business with U.S. designated individuals and entities; sanctions on insurance; and restricted access to the U.S. financial system, sanctions on long-term investment of technical services to Iranian energy sector, military program and US trade restrictions with Iran and all UN Security Council sanctions related to Iran’s state sponsorship of terrorism, and human rights violation record.[6] The United States nonetheless has promised not to impose new sanctions for six months (only if permissible within its political system); and allow purchases of Iranian oil (though limited due to existing sanctions), governmental tuition assistance for Iranian students in foreign universities and facilitate humanitarian transactions as limited by U.S. law, which include purchase of food, agricultural commodities, medicine and medical expenses for Iranians incurred abroad.

STRATEGIC REPERCUSSIONS FOR THE US AND IRAN

The progress of a diplomatic agreement to end the threat of Iran’s acquisition of nuclear weapons has ensured a rapprochement in US-Iran relations with US President Barack Obama, speaking amicably by telephone with the Iranian President Hassan Rouhani in September, the first time leaders of the two countries have spoken to each other since the 1979 Islamic revolution. The United States seems to be in an attempt to scrap odds and ends of the nuclear presence in the West Asian region by ending the detente with Iran, while focusing on simultaneously clearing out Syrian production of nuclear and chemical weapons.[7] For nearly 20 years, Iran’s nuclear program has been an area of contention for the West with a number of agreements crumbling under the pressure of minimal contact between the United States and Iran. The relationship under the conservative leadership of former Iranian President Mahmoud Ahmadinejad had entered an all time low, with the United States imposing large scale sanctions on the country. However with the coming of the reformist leadership under Rouhani, there seemed to be a change in the political sphere of Iran as a country and its welcoming posture towards the West including the United States. It is to be noted however that despite their willingness to mend ties, the two countries continue to restrict their relationship by putting forward demands. The US has taken the opportunity to imply its concern about Iran’s role in Syria and its influence in Afghanistan; post a withdrawal scenario, while at the same time Iran has rejected any conditions for taking part in a peace conference on Syria which calls for a transitional government in Damascus.[8]

The handling of Iran by the United States has outraged its regional ally Saudi Arabia, who fears that easing of sanctions may not necessarily reduce Iran’s nuclear expansion in the region. Israel on the other hand believes its survival to be at stake if hopes for détente between the US and Iran fructify as it might jeopardise its relations with its closest ally and also shift power equations in the region. The United States however wants to continue to project power in West Asia, mainly to assure oil supplies and also continue to support Israel, but it is certain that it may not be as influential as it was during the late 20^th century. Such realignment therefore leaves a vacuum for other emerging competing and accommodative powers to fill the position of regional leadership including Russia.

However, the nuclear agreement focuses to define the geostrategic role of Iran in Asia and its participation in the stabilization of Iraq, Syria, Palestine and Afghanistan. Also, easing up economic sanctions on Iran aims to further strengthen Iranian infrastructure, R&D, and developmental projects that will help provide employment to the increasing young population in the region. It also aims to help accommodate growing oil production from Iran and Iraq, pressure from shale oil production in the US and alternate energy routes and infrastructure from Iran to China, Central Asia, Pakistan and India.[9] It also aims to strengthen intra-regional relations as Iran-GCC relations can benefit from easing sanctions in agriculture, industry, services and capital for investment.

REPERCUSSIONS FOR INDIA AND ITS RESPONSES

For Iran’s extended neighbour and largest importer, India has been consistent with its positive position on the nuclear deal. Indian officials have welcomed the prospect of resolving questions related to Iran’s nuclear program through dialogue and diplomacy and have supported the IAEA’s decision as it is the only competent technical agency to verify the “exclusively peaceful” nature of Iran’s nuclear activities. However India has stressed on the recognition of Iran’s right use of nuclear energy for peaceful purposes and its international obligations as a non-nuclear weapon state.[10]

The agreement has come at a time when India along with a large number of oil importing countries, have been paying heavily for their oil shares. During 2012-2013, Iranian supplies made up for 7.2 per cent of India’s oil imports, decreasing heavily from 10.5 per cent in the previous year.[11] However with the agreement, shares of oil marketing companies including the Indian Oil Company have risen[12] and with a promise of no further reduction in oil imports. Also, the deal looks at easing measures related to insurance, and also allow the shipping companies to transport oil from Iran to India. According to official sources, it is estimated that around $8.5 billion can be saved if India imports an additional 11 million tonnes of Iranian crude and also discuss the issue of accepting transactions in India rupees.[13] However, India will need to be more proactive and reactive in taking the opportunity into consideration; mainly as sans sanction, Iran will be looking to trade its nuclear programme for strategic dividends (as it is willing to abide by the deal for economic opportunities) from other countries. India should not waste time making slow decisions but should prompt through delegations to restart offers that were not possible with the sanctions including request of oil and gas concessions to India; and further interest in economic projects in Iran mainly the ongoing Chabahar project and the much debated Iran-Pakistan-India pipeline.

CONCLUSION

Therefore for the success of the agreement, Iran has in fact committed to halt enrichment above 5% and neutralize its stockpile of near-20% uranium, to project its interest in power generation and not nuclear bombs. It has committed to no further advances of its activities at Arak including further fuelling, installation and production, to halt progress on its plutonium conversions, and to transparency and intrusive monitoring of its nuclear program by the IAEA.

However, the agreement sets to put trivial details into complications for Iran, atleast for the first six months of its establishment and also marks discrimination to Iran inspite of certain reliefs. Terming conditions as comparable to that of a rogue state and loss of national sovereignty, the first phase aims to provide around $7 billion in relief to Iran, when in fact Iran’s foreign exchange holdings of a total of $100 billion continue to be inaccessible or restricted by sanctions.[14] In the next six months, Iran’s crude oil sales cannot increase which may continue loss in revenues to Iran. While Iran will be allowed access to $4.2 billion of its oil sales, nearly $15 billion of its revenues during this period will go into restricted overseas accounts.[15] Also the first enforcement action since the first step agreement has been initiated by the US by targeting entities, around 19 companies suspected of involvement in the proliferation of materials for weapons of mass destruction, which include companies such as Oil Asia, Ferland Company Limited and Vitaly Sokolenko.[16] These new sanctions have created uproar amongst the Iranian delegates, who have seen this move (rumoured to be instigated by Israel), as a collapse of the nuclear deal, amidst support from Russia.  However the US has reconfirmed its commitment to the success of the nuclear deal and has ensured that the sanctions are to facilitate Iran’s peaceful nuclear program.

Therefore, the nuclear talks between Iran and the West has once again brought the region into the forefront of world politics and has allowed analysts to ponder on a possible realignment of power equations in the region. It is however certain that to keep their presence in the West Asian region (Middle East), the United States requires a desperate victory in the region but one which may focus on the nuclear issue in the region rather than obliging to requests of its traditional allies in the region such as Saudi Arabia. Also, an American attempt to ensure regional stability solely based on a nuclear focused bilateral deal with Iran may turn out to be a marked as a mere conciliation to bringing peace in the region and not long term stability. This may however distort power equations in West Asia by realigning strategic partnerships and may aggravate regional insecurities of various regional players, leading to difficult prospects for achieving stability in the broader region.

Disclaimer: The views expressed in this article are personal.