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June 29, 2015

Iran nuclear deadline: Showdown in Vienna

By Pepe Escobar

Iran will increase production from 800 million to 1.2 billion cubic meters a day up to 2020. But for that to happen, it needs at least $100 billion in investment from European energy majors. It's all there, tantalizingly, on the horizon, a Chinese-style "win-win" for both Iran and Europe. But first, the showdown in Vienna.

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Reprinted from Asia Times


This is it? No one knows. As foreign ministers gather in Vienna ahead of the June 30 deadline, an Iranian government source tells Asia Times it's a "done deal." For days, there have been no leaks, certainly to prevent hardliners on both sides -- Iran and especially the U.S. -- from ruining it at five seconds to midnight.

Realistically, all the myriad complex components are not there for a conclusive nuclear deal between Iran and the P5+1. Not yet. Iranian deputy lead negotiator Seyed Abbas Araqchi said earlier this week that "progress is not as expected." Both presidents, Obama and Rouhani, badly want it, while both hardcore lobbies -- in Washington and Tehran -- are keen on derailing it.

Witness an open letter by the usual suspects, some of them former Obama advisers, stating, "the agreement will not prevent Iran from having a nuclear weapons capability" -- which is a flat-out lie; and predicting the deal will "fall short of meeting the administration's own standard of a 'good' agreement," which implies they are fully briefed on all the negotiation's nuances, and they're not.

Predictably, the open letter was published by the neocon-infested and rabid anti-Iran WINEP think tank; signatories include disgraced former Iraq and Afghanistan surge schemer Gen. David Petraeus and Dennis Ross -- who never "negotiated" anything that didn't put Israel's interests ahead of the US.

Bets can be made that the June 30 deadline won't hold; this may go on until the end of next week at least. As a nail-biting finish that is not -- yet -- a finish, it's unrivalled. Especially for global businesses -- not least the energy industry -- who are getting ready for a tectonic geopolitical shift; Iran finally "rehabilitated" in the West (yes, because with the East it's always been business as usual.)

It's a gas, gas, gas

It's no surprise Supreme Leader Ayatollah Khamenei had to lay down Iran's red lines ahead of June 30. After all, the April 2 Lausanne "package" which is the basis for the current negotiations leading to a possible final Vienna deal is deliberately hazy -- and subject to conflicting interpretations, especially over the timing for sanctions to be totally lifted.

Khamenei insists sanctions by the UN and the US should be lifted as soon as a deal is signed; Washington will never agree, as the State Department insists this is first of all about IAEA "verification," then easing of sanctions.

The same applies for Tehran not accepting to be restricted on nuclear research and development for ten years. Even Russia and China agree Iran must comply with "verification" -- under the framework of a civilian nuclear program.

The point is not the Supreme Leader is plying a D.O.A. deal. The point is Khamenei, for complex internal purposes, must keep potentially unruly ultra-conservatives and hardliners on board. And because the Lausanne package's rhetoric is deliberately pliable, he can play along with the red lines -- always emphasizing Iran's "heroic," or "brave and faithful" negotiators, led by Foreign Minister Mohammad Javad Zarif.

The fact also remains that no one knows which will be the language on the final deal -- until a detailed written agreement is endorsed by the Iranian Parliament and the US Congress. So for the moment, we're in Nietzsche territory; there are no facts, only interpretations.

But what the business world is salivating for, are facts. Every energy major has its eyes set on Tehran, discussing post-sanctions serious business. Italy's ENI has been talking. Same for Shell. Same for BP (although they don't acknowledge it.) In the case of Shell there's the matter of the $2 billion it owes to the National Iranian Oil Company (NIOC) -- unpaid because of sanctions.

Iran holds at least 30 million barrels of oil in storage. So will there be an oil flood in the weeks to come (with the Chinese buying everything)? It depends on what sanctions are to be immediately lifted. And this means oil prices falling -- which is something Russia and Saudi Arabia, considering the recent meeting in St. Petersburg between Putin and the House of Saud, are not exactly keen on at the moment.

It will be a slow process. According to Iranian Oil Minister Bijan Zanganeh, Iran is ready to increase production by around one million barrels a day after sanctions are lifted. Currently, Iran produces around 2.7 million barrels a day and exports 1 million. Realistically, Iran may add 600,000 barrels a day by the end of 2017. Further than that, it needs a lot of infrastructure investment.

Same for the gas industry. At the World Gas Conference earlier this month in Paris, NIOC's Azizollah Ramezani said Iran will increase production from 800 million to 1.2 billion cubic meters a day up to 2020. But for that to happen, it needs at least $100 billion in investment from European energy majors. It's all there, tantalizingly, on the horizon, a Chinese-style "win-win" for both Iran and Europe. But first, the showdown in Vienna.



Authors Bio:

Pepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of "Globalistan" (2007), "Red Zone Blues" (2007), "Obama does Globalistan" (2009) and "Empire of Chaos" (2014), all published by Nimble Books. His latest book is "2030", also by Nimble Books, out in December 2015.


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