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Iran’s ally Russia may spoil nuclear talks to keep oil price high

<i>Michael Gruber/AP</i><br/>
Michael Gruber/AP

By Abbas Al Lawati and Nadeen Ebrahim, CNN

A revival of the 2015 Iran nuclear deal appeared to be imminent by the end of last week. The main parties to the talks indicated that an agreement was close, until an unlikely hurdle emerged.

Russia, which has largely stood by Iran in its conflict with the West, said Saturday that its own national interests would have to be taken into account for a deal to go through.

The warning came after Tehran said on Friday it had agreed a roadmap with the UN nuclear watchdog to resolve outstanding issues, suggesting that talks were close to conclusion.

The surprise Russian move demonstrates how far Moscow is willing to go to use its leverage in faraway conflicts to pressure the West while it wages war on Ukraine, even at the risk of displeasing its allies in Tehran. It also shows Russia’s realization that the United States needs a nuclear agreement now more than ever to find a replacement for disruption to Russia’s crude supplies on the global market.

Iranian Foreign Minister Hossein Amir-Abdollahian said Monday that his country would not “allow external factors” to affect their national interests in the talks.

In a phone call later on Monday, Russian Foreign Minister Sergey Lavrov told Amir-Abdollahian “that the resuscitation of the JCPOA should ensure that all its participants have equal rights regarding the unhindered development of cooperation in all areas,” the Russian embassy to Iran said, using the acronym for the 2015 nuclear deal.

France warned Russia not to resort to “blackmail.”

A restoration of the 2015 nuclear agreement between world powers and Iran could see over a million barrels of sanctioned Iranian oil coming back to the market.

Russia’s warning came as the US said Sunday that it is exploring banning imports of Russian oil with its European allies in response to the invasion of Ukraine. Brent crude climbed near $139 a barrel after the announcement, its highest since 2008.

Lavrov said Russia wanted a written guarantee from the US that Moscow’s trade, investment and military-technical cooperation with Iran would not be hindered in any way by Western sanctions on Moscow.

“Both Russia and China were written into the JCPOA to handle specific elements,” said Trita Parsi, vice-president of the Quincy Institute in Washington, DC. “Some of the low enriched uranium was supposed to be shipped out to Russia” and some of that activity could fall under the new sanctions the US is imposing on Russia, he said.

Russia’s demands could be legitimate, said Parsi, but they could also be a pretext to delay a new agreement with Iran.

Western sanctions could significantly curtail Russia’s oil exports but they would drive global prices even higher as the US grapples with high inflation. That would make the need for alternative sources of crude more urgent for Western states. Moscow supplies 8% of the world’s oil.

Iran would quickly be able to raise its output to 3.8 million barrels per day if sanctions are lifted, Oil Minister Javad Owji said last week. It pumped 2.4 million barrels per day on average last year.

“That will take pressure off the US and add pressure on the Russians, whose only export [to the West] at this point is gas and oil,” said Parsi. “At a minimum it seems the Russians want to delay it. At a maximum they may actually want to scuttle it altogether.”

Western states need more oil on the global market to bring inflation under control domestically. But they also see it as a tool to make the Ukraine war costly for Russia. Oil income accounted for 36% of Russia’s total budget last year and rising crude prices have only helped fill the state’s coffers, fueling the war.

Russia’s new demands come as Moscow and Tehran grow distant on some global matters. Iran abstained from a vote at the United Nations General Assembly condemning Russia’s invasion of Ukraine last week. Its Supreme Leader Ali Khamenei earlier refrained from condoning his ally’s actions, opting instead to condemn NATO’s expansion. Iran’s UN abstention came after Russia voted in favor of a United Arab Emirates-backed Security Council resolution sanctioning the Iran-allied Houthi rebel group, after previously abstaining from a similar vote.

Other top Middle East news

Yemen’s Houthis sign deal with UN to offload decaying oil tanker

Yemen’s Houthis on Saturday said they had signed an agreement with the United Nations to deal with a decaying oil tanker that has been stranded on the country’s Red Sea oil terminal for six years.

  • Background: The Safer has been stranded on Yemen’s Red Sea oil terminal of Ras Issa for more than six years, threatening to spill 1.1 million barrels of crude oil off the war-torn state’s coast.
  • Why it matters: The decaying tanker is an environmentally disastrous ticking bomb. The UN has warned it could spill four times as much oil as the 1989 Exxon Valdez tanker spilled off Alaska’s coast. Last month, the UN said there was an agreement in principle to move oil from The Safer onto another ship, but no timeline was given.

Global financial crime watchdog adds UAE to ‘grey’ list

The UAE on Friday was added to Paris-based Financial Action Task Force (FATF)’s ‘grey’ list, subjecting the Middle East business hub to closer monitoring for possible money laundering.

  • Background: The UAE has emerged as the region’s business and gold trading hub, attracting some of the world’s wealthiest individuals. It has recently taken steps to combat its image as a center for illicit money, especially after a 2020 FATF assessment that called for “fundamental and major improvements” by the UAE.
  • Why it matters: The Gulf nation is trying to position itself as a competitive economy to attract global investment and talent. The listing by FATF could be a hurdle in those efforts.

UN envoy urges end to oil blockade on two oilfields as daily output slashed

The UN’s envoy to Libya Stephanie Williams on Monday urged the country’s National Oil Corporation to lift the force majeure imposed on two oilfields, saying that “blocking oil production deprives all Libyans of their major source of revenue.”

  • Background: Libya’s NOC said it had to impose a force majeure on Libya’s El Feel and Sharara oilfields after a pipeline valve shut down, resulting in the loss of 330,000 barrels per day (bpd), and over 160 million dinars ($34.69 million) on a daily basis.
  • Why it matters: Libya’s oil output is one of its sole remaining sources of revenue. Production has been repeatedly halted over the country’s past tumultuous decade. The global oil market is already gravely undersupplied, with crude prices soaring to their highest since 2008.

Around the region

Female judges on Saturday took the bench for the first time at Egypt’s State Council, a landmark event that finally brought women to top court positions in the male-dominated Arab country.

Last year, a presidential decree saw 98 women sworn in as judges to the council for the first time since the council’s establishment in 1946. The appointment took effect on Saturday.

There is no law that bans women from taking high-level judicial positions in Egypt, but women’s applications have been rejected for decades at higher ends of the judicial ladder.

The council repeatedly rejected female applicants until last year’s decree, said the state-owned Al Ahram newspaper.

Egypt’s first-ever female judge was Tahany al-Gebaly, who in 2003 was appointed as vice-president of the Supreme Constitutional Court. Gabaly was removed from her post in 2012 under then President Mohamed Morsy. She died in January after contracting Covid-19.

There were more than 45 million women in Egypt as of 2018, according to data from the state statistics agency CAPMAS, representing almost half the population. Egypt’s population is more than 102 million.

Photo of the day

A previous version of this story mischaracterized Iran’s response to Russia’s demands. It has been corrected.

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