Decoding Iran Nuclear Deal

Iran-Nuclear-Deal-1

On April 2, news emerged from Lausanne — a small and picturesque Swiss town on the shores of Lac Léman — that a framework for a nuclear agreement between Iran and six major powers (P5+1) has been reached. The news was followed by a short joint press conference by Javad Zarif, the Iranian foreign minister, and Federica Moghierini, the High Representative of the European Union for Foreign Affairs and Security Policy, whereby they confirmed that a significant milestone had been reached, and that an agreement would be drafted by 30th June. The deal marks a major breakthrough in a 12-year standoff between Iran and the West, which has long feared Teh­ran wants to build a nuclear bomb.

The Deal & the Nuclear Iran

1. Uranium Enrichment

Iran agrees not to enrich any uranium above the level of 3.67 percent.

What is it? The process of turning uranium found in the ground into nuclear fuel that can be used to create nuclear energy, or potentially a nuclear bomb.

Why is it important? To build a nuclear bomb, uranium needs to be enriched to about 90 percent. For the next 15 years, the Islamic Republic of Iran has agreed not to enrich any uranium above the level of 3.67 percent. It means that it would be practically impossible for Iran to build a nuclear weapon. However, Iran can use nuclear material for peaceful purposes.

The outcome: Iran gets to keep its nuclear programme, albeit a limited one, while the likes of the US now know it will be much harder for Tehran to build a bomb.

2. Centrifuges

Iran cuts centrifuges from 19,000 to 6,104, with 5,060 for enrichment.

What are they? Centrifuges are vital to extract nuclear fuel from uranium in its mineral form. They work by spinning around at high speeds, which separate the different particles, eventually just leaving enriched uranium.

Why are they important? 6104 centrifuges which Iran has been allowed to keep are first generation and not the technically-advanced modern versions. If Tehran wanted to build a bomb now, it would take a very long time.

The outcome: The agreement stipulates that Natanz will be the only remaining nuclear enrichment facility in Iran. There, the 5,060 first-generation centrifuges will spin for the next 10 years. All of the rest of the site’s centrifuges will be removed. It is to be noted that Israel and US Republicans wanted Iran to give up all its centrifuges, while Barack Obama was originally prepared to let it keep 6,500.

Iran-Nuclear-Deal3. Uranium Stockpiles

Iran to cut the amount it keeps from 10,000kg to just 300kg

What are they? Uranium is the key ingredient required to operate a nuclear programme. Once it has been enriched, it can be used to generate power or create a nuclear weapon.

Why are they Important? By giving up nearly 97 percent of its uranium stockpiles, Tehran has effectively given up any possibility to create a nuclear bomb.

The outcome: By reducing its stockpiles, Iran has increased transparency with the International Atomic Energy Agency (IAEA), while also making a commitment to use its nuclear programme for peaceful purposes.

4. Inspections

IAEA will have access to all Iran’s nuclear facilities

What is it? The IAEA is an organization that promotes the peaceful use of nuclear power and is against the building of nuclear weapons that are used for military purposes.

Why is it important? The deal will allow the international community to see if Iran is keeping its end of the bargain. The IAEA will be able to monitor everything concerning Tehran’s nuclear programme – from the reactors to the materials, such as uranium and centrifuges.

The outcome: With such transparency in place, it would be almost impossible for Iran to develop a nuclear weapon without getting caught.

5. Sanctions

Iran will see crippling sanctions lifted, if it keeps its end of bargain

What are they? The latest sanctions were introduced against Iran in 2006 after Tehran refused to halt its uranium enrichment programme.

Why are they important? Sanctions introduced against Iran have had a devastating effect on its economy. Areas such as oil and gas have been affected, while Tehran’s finance sector was also badly hit. This made it difficult for Iran to trade on the world market, while areas such as Iranian aviation industry suffered greatly, as they were unable to get spare parts from the US and the West.

The outcome: The sanctions will only be fully lifted once Iran has proven it has stopped its nuclear enrichment programme. Once they are lifted, it will be a massive boost to Tehran’s economy as it will increase trade and see new investment into the country.

Why the Deal?

The agreement outlines major points to be flesh out in a final deal, the details of which have to be worked out by the end of June 2015. President Barack Obama while welcoming the “historic understanding” with Iran, cautioned that more work needed to be done. He also said that the framework agreement between Iran and six world powers is a “good deal” that will increase Iran’s nuclear breakout time from around two to three months to more than a year.

Other Points of the Deal

The so-called P5+1 group — the United States, Britain, China, France and Russia plus Germany — hope that the deal will make it virtually impossible for Iran to make nuclear weapons under the guise of a civilian programme. Under the deal, Iran will have to fulfil the following conditions:

  1. The IAEA inspectors will also be able to inspect Iran’s uranium mines and mills for the next 25 years.
  2. Iran’s centrifuge manufacturing facilities will be frozen and remain under surveillance.
  3. Iran has agreed to allow the IAEA to investigate any allegations of secret sites for nuclear production, centrifuge production, or yellowcake production.
  4. The US and EU have agreed to suspend their sanctions upon IAEA verification. But US officials say those sanctions can be reapplied.
  5. There will be limited enrichment capacity at the Fordow uranium enrichment site. It will be converted into a nuclear physics site, with no fissile material present on premises and international cooperation for R&D is encouraged.
  6. The heavy water reactor in Arak will be repurposed for nuclear research and radioisotope production. The core of the reactor — designed to produce plutonium — will either be destroyed or taken out of the country.
  7. Iran has agreed not to build any new enrichment facilities or another heavy water reactor for the next 15 years.
  8. As the next phase of negotiations gets underway, between now and June 30, 2015, no new action on sanctions is being taken.
  9. The international monitoring agency will have enhanced access to technologies to clarify past and present issues.
  10. A future deal between Iran and P5+1 powers will include UN security council endorsement.

Iran-Nuclear-Deal-2What Iran Gets?

Iran was reborn as a major Middle East nation when it agreed to limit its nuclear ambitions. Despite the “ifs” (if Iran complies with the “key parameters”, if Iran’s Revolutionary Guards don’t try to wreck the agreement, if Israel does not batter Iran’s nuclear facilities in a rogue nation attack) the framework could one day return the 36-year-old Islamic Republic to the status of a regional superpower which last existed under the Shah. The deal brings following benefits for Iran:

  1. In return for the IAEA verifying Iran has conducted the measures agreed, the six world powers agreed to waive US and European banking and oil sanctions in a phased manner.
  2. US and EU nuclear-related sanctions will be suspended after the IAEA has verified that Iran has taken all of its key nuclear-related steps.
  3. All past UN Security Council resolutions on the Iran nuclear issue will be lifted simultaneous with the completion, by Iran, of nuclear-related actions addressing all key concerns (enrichment, Fordow, Arak, PMD, and transparency).
  4. However, core provisions in the UN Security Council resolutions – those that deal with transfers of sensitive technologies and activities – will be re-established by a new UN Security Council resolution that will endorse the Joint Comprehensive Plan of Action (JCPOA) and urge its full implementation. It will also create the procurement channel mentioned above, which will serve as a key transparency measure. Important restrictions on conventional arms and ballistic missiles, as well as provisions that allow for related cargo inspections and asset freezes, will also be incorporated by this new resolution.
  5. A dispute resolution process will be specified, which enables any JCPOA participant, to seek to resolve disagreements about the performance of JCPOA commitments.

Expected Impact on Oil Prices

The framework nuclear deal boosts the odds for the lifting of curbs on Tehran’s oil exports, but it doesn’t throw open the floodgates of Iranian crude supply just yet. Any ramp up in Iranian oil exports depends on a final nuclear deal in June, a subsequent lifting of sanctions and the pace of recovery in Iran’s investment-starved oil sector. Oil prices fell after the framework deal was announced, with Brent crude losing 3.7% in the last trading session, but the drop will likely wash out when harsh debate over the agreement begins. If a final nuclear agreement is reached by the end of June, it could take three months to lift or suspend oil and banking sanctions against Tehran and another six months to restore 1 million barrels a day of oil production and exports. However, Iranian crude will not become a major issue for the oil markets until 2016. If sanctions are lifted Iran could supply another 1 million to 1.2 million barrels of oil a day by next year, adding to the global oversupply and pressuring oil prices.

Reactions

“A negotiated solution to the Iranian nuclear issue will contribute to peace and stability in the region and enable all countries to cooperate urgently to deal with the many serious security challenges they face.”

Ban Ki-moon

Secretary-General of the United Nations

 “This will be a long-term deal, that addresses each path to a potential Iranian nuclear bomb.”

Barack Obama
President of the United States

“Some think we have no option except to fight the world or to surrender. But there is a third way, too. We have to have cooperation with the world.”

Hassan Rouhani
President of Iran

“Israel will not accept an agreement which allows a country that vows to annihilate us to develop nuclear weapons.”

Benjamin Netanyahu
Prime Minister of Israel

“The Custodian of the Two Holy Mosques [King Salman] expressed his hope that reaching a final binding deal would strengthen the stability and security of the region and the world.”

 According to Saudi Press Agency

“It is our earnest hope that the parties concerned will be able to finalise the comprehensive agreement before the end of June and its implementation will contribute to stability in the region.”

Pakistan Foreign Office

Conclusion

Certainly the agreement on Iran’s nuclear programme, reached in Lausanne, may one day be a key to the future of a country whose conflict has become one of the greatest Arab tragedies of modern times. Yet history often turns in circles, even in little Swiss cities. Lausanne is where the Ottoman Empire was finally closed down in the last century — it is something to which Osama bin Laden used to allude — and where caliphates came to an end before the modern Arab dictators re-created them with their own families.

Perhaps the Iranian empire, or a modern version of it, will one day come to believe its rebirth occurred in the same Swiss town. So watch out for the next political earthquake in the Middle East. But remember all those “ifs”.

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