The Silver Lining of an Extension of the P5+1 Nuclear Talks with Iran
On November 24, the P5+1 talks with Iran on its nuclear program were extended by seven months. The failure of both sides to reach a final agreement has raised concerns that this delay reduces the likelihood that international fears about Iran’s nuclear program will be resolved peacefully. The extension is actually good news and raises the odds that both sides will be able to reach a comprehensive nuclear deal in 2015. There are three reasons why time is on the side of the United States in these nuclear negotiations.
Congress: The Republican takeover of the Senate during the midterm elections actually strengthens the Obama administration in its negotiations with Iran. As recently as November 13, Republican senators tried—and failed—to pass legislation that would impose new sanctions on Iran and give Congress veto power over a nuclear deal with Iran. The success of the Republican Party during the midterm elections means that once the 114th Congress is sworn in in January 2015, there is a strong likelihood that such legislation could pass the Senate (it has already passed in the House). Undersecretary of State Wendy Sherman, who is leading the U.S. delegation, can credibly argue that the only way the Obama administration will be able stave off further sanctions, or even provide relief from current sanctions, will be for Iran to accept tighter limits on its nuclear program and more intrusive verification measures. Iranian foreign minister Mohammad Javad Zarif, who spent many years studying and working in America, is familiar enough with the U.S. political system to recognize that this would not be a bluff or a simplistic “good cop, bad cop” routine.
Oil: Given the weak state of the Iranian economy, simply walking out on the negotiations or dragging them out indefinitely is not an option. Since 2012, Iran has been under tough economic and financial sanctions that have significantly limited its ability to produce and export oil—the main source of government revenue. According to the Congressional Research Service, “sanctions drove Iran’s oil sales down about 60 percent from 2.5 million barrels per day in 2011, reducing Iran’s crude oil sales revenue from $100 billion in 2011 to about $35 billion in 2013.” The loss of revenues from oil and access to the international banking system caused Iran’s economy to shrink by about 5 percent in 2013. Iran’s economic problems have been worsened by the recent drop in oil prices from over $100 to around $80, the lowest since 2010. As a result, President Rouhani admitted last month that Iran’s oil revenue was down by 30 percent. The U.S. Energy Information Agency estimates that oil prices will remain this low throughout 2015. The Organization of the Petroleum Exporting Countries (OPEC) meeting on November 27 will be key for Iran. If, as expected, Saudi Arabia refuses to cut production to boost prices, then Iran faces bleak economic prospects without a nuclear deal that lifts sanctions. For Rouhani, elected in large part for his economic-reform agenda, cinching a nuclear deal is key to his political survival.
Iraq. When the Islamic State of Iraq and Syria (ISIS) swept through Iraq during the summer and Iraqi government forces collapsed en masse, the United States and Iran found themselves confronting a shared enemy. Iran, however, was far better positioned at the time to support the Iraqi government—by providing troops, drones and aircraft and mobilizing Shiite militia groups—than the United States. This dependence on Iranian cooperation for fighting ISIS led many to fear that Iran would use the situation to push for more lenient terms in the nuclear deal. While the situation is far from stable in Iraq, it is a good deal better than it was over the summer and the importance of the Iranian contribution to the fight against ISIS has diminished. The U.S.-led international air campaign against ISIS targets in Iraq and Syria continues to make incremental progress. More importantly, the United States is in the process of doubling the number of troops deployed to Iraq and has expanded its plan to train and equip Iraqi forces. Although Iraqi forces drawn from the regular Army, Shi’ite militias, Kurdish peshmerga and Sunni tribes are not yet strong enough to serve as the anvil to the hammer of American airpower, they are gaining strength. Just last week, government and militia forces recaptured the strategic city of Baiji in northern Iraq, which is home to the largest oil refinery in the country.