Moratorium on US Oil Sanctions to Open Talks With Iran

The diplomatic manoeuvrings over the situation around Iran are entering a crucial phase with an Iranian delegation led by Deputy Foreign Minister Abbas Araqchi leaving from Tehran for Paris today to pick up the threads of the 3-way discussions involving France, Iran and the United States at Biarritz a week ago on the sidelines of the G7 summit.

Araqchi is Iran’s chief negotiator with the E3 — France, UK and Germany — on the nuclear issue. Interestingly, Araqchi openly acknowledged on Saturday that the US has “shown some flexibility on the licensing of Iranian oil sales.”

The formula that was tossed around in Biarritz that the US will not oppose income being generated for Iran through oil sales is being finessed and linked to the working of the European Union’s trade mechanism for legitimate trade with Iran known as INSTEX. In essence, the formula is based on the French proposal of “freeze for freeze” — US freezing oil sanctions against Iran while Iran will freeze its steady pullback from the JCPOA commitments. 

Araqchi said Iran and its European partners in the nuclear deal faced “difficult and complex” talks towards salvaging the pact. But a note of cautious optimism is apparent in Foreign Minister Javad Zarif’s remark in Tehran following a meeting of National Security and Foreign Policy Committee at the Iranian parliament on Sunday afternoon that Iran may review decision to further reduce JCPOA commitments if the European countries take action on INSTEX to live up to their own obligations. Tehran expects the Europeans to take a final decision by Thursday. 

In the above backdrop, Iranian President Hassan Rouhani telephoned French President Emmanuel Macron on Saturday to convey Tehran’s interest in resuming the discussions under the latter’s mediation. Macron welcomed the move. Rouhani also assured Macron that Iran is supportive of a political settlement in Yemen and is willing to guarantee the security of the shipping lanes in the Persian Gulf and the Strait of Hormuz. 

Perhaps, in an indirect alert to the US President Trump, Rouhani conveyed to Macron Iran’s misgivings that Israel is pulling all stops to derail the current negotiations which are at a delicate stage. Rouhani specifically referred to the Israeli attempt to provoke a flare-up involving Iran somehow, as evident in its recent air attacks on Lebanon, Syria and Iraq successively. The Hezbollah retaliated on Sunday by attacking Israel’s military vehicles, leaving a number of Israeli forces reportedly dead or injured. 

In a sure sign that a broad settlement of the situation around Iran is under discussion, Zarif has travelled to Moscow with a high-level delegation aimed at coordinating the Iranian and Russian positions. Iran’s special envoys for Afghanistan, Yemen, and Syria are accompanying him. (Interestingly, Zarif referred to “serious developments” in Afghanistan, hinting at imminent US-Taliban deal this week.) Indeed, Iran is across the board addressing the western disquiet over Iran’s role in the conflicts in Yemen, Syria and Afghanistan. Tehran’s diplomatic priority will be to underscore that it can be a factor of regional security and stability. 

From all appearance, Macron is steering the negotiations along three parallel tracks: a) forestall any precipitate crisis in the implementation of the 2015 nuclear deal by enabling Tehran to generate income out of oil sales that helps alleviate the hardships in the Iranian economy; b) persuade the Trump administration to concede Iran’s prerogative to resume trade relations with Europe and generate income through oil sales; and, c) defuse and de-escalate the various ‘hotspots’ in the Middle East where Iran’s role is regarded as critical — principally, Yemen, Syria and Afghanistan. 

A convergence of the three tracks can be expected to lead to a new understanding between Tehran and Washington, possibly even a near-future summit involving the US and Iranian presidents. The clock is ticking and there is urgency to generate momentum for Macron’s efforts, as Trump and Rouhani are due to attend the UN General Assembly in September. A meeting is entirely conceivable as things stand. 

Indeed, a deeply troubled relationship such as the Iranian-American is bedevilled with a lot of signalling and grandstanding, especially on the part of Tehran where Rouhani has to overcome significant resistance to the very idea of engaging with the US. The Supreme Leader Ali Khamenei has not said a word so far on Zarif’s visit to Biarritz or the 3-way France-Iran-US discussions under way. Tehran keeps repeating the demand on the lifting of the US sanctions as a pre-requisite for a face-to-face meeting between Rouhani and Trump.

However, it is possible to discern that Tehran is open to negotiations without preconditions and to strive for a meaningful breakthrough by optimally resorting to creative and flexible diplomacy. This flexibility factors in the assessment that Washington too is in a chastened mood.

The Trump will not book disruption by “hardliners”. Several Israeli attempts to have a phone conversation between PM Benjamin Netanyahu and Trump at Biarritz failed to materialise. Trump understands that all attempts by the US to create an international coalition against Iran have failed. 

The law of diminishing returns is at work. The maximum pressure strategy against Iran is opening the window for an unprecedented expansion of Russian and Chinese influence in Tehran which may damage American regional interests in the long-term. The planned first-ever naval exercises between Iran and Russia in the Persian Gulf has rattled the US. 

All in all, we may expect a moratorium on US oil sanctions in exchange for Iran’s compliance with its JCPOA obligations, which would be followed by direct negotiations for a historic thaw in the US-Iran relations.