Iran claims to have developed a hypersonic missile. Image: Youtube

There could be a feeling of deja vu over the news that indirect talks began between the United States and Iran under the mediation of the European Union in the Qatari capital Doha on Tuesday (June 28).

Is any positive outcome to be expected in terms of reviving the 2015 Iran nuclear deal? Quite likely. The reason for saying so is that there is a confluence of circumstances, internal and external, that gives hope.

Various compulsions are working on Washington and Tehran – and Brussels – which lend an acute sense of urgency on the part of these main protagonists in the nuclear talks to look for light at the end of what has been a long and winding tunnel. One may call it the “TINA” factor, the acronym that stands for There Is No Alternative. 

To take Iran first, the regime in Tehran is desperately seeking the lifting of the US sanctions and economic blockade that have limited the country’s oil exports, decimated the value of its currency against the dollar – now worth one-tenth of its value at the time of the 2015 nuclear deal – and deepened the poverty of the people, all snowballing into much social unrest eroding political stability.

In the last few months, there have been almost weekly anti-government protests over poverty, unaffordable housing costs, cascading inflation (touching 40%), a massive jump in food prices (more than 80%), very high unemployment (more than 20% of all 15-to-24-year-olds according to official figures), and so on.  

Of late, ominously enough, the Bazaar has begun joining the protests and strikes by the other organized sections of society, which signals a paradigm shift in Iran’s politics.

Iranian President Ebrahim Raisi is under economic pressure. Photo: AFP / Atta Kenare

Of course, the regime’s social and political base is substantial and its control of the state apparatus should not be underestimated. But the fact of the matter is that the country is performing far below its potential, reaching a cul-de-sac, which doesn’t have to be the case for the clergy-led bourgeois nationalist regime, given the country’s vast untapped resources for accelerating its growth and development. 

As for the administration of US President Joe Biden, the present stalemate is fraught with great danger as Iran’s nuclear program is steadily advancing and in a near future it may already have outgrown the confines of the 2015 Joint Comprehensive Plan of Action (JCPOA).

At that point, Washington may have to resort to coercive means to cap and roll back the dangerous slide that would surely trigger Iranian retaliation against the US and its regional allies with disastrous consequences all around.

That this may happen against the backdrop of the heightened tensions in the United States’ relations with Russia and China and an economic crisis at home complicates matters further, even possibly endangering Biden’s bid for a second term as president. 

On the other hand, an Iran deal at this point would most certainly improve the prospects for a historic thaw in the relations between the two countries.

Such a deal would create a “win-win” situation with seamless business possibilities in trade, economic ties, stimulating in turn the latent forces of moderation within Iran that always sought balanced external relationships between the West and East – something that could transform the geopolitics of the region and be a tipping point in the emerging world order. 

For both the US and the EU, there is great urgency to restore the JCPOA so that sanctions can be removed and Iran’s vast oil reserves can re-enter the market.

For Washington, given the correlation between the price elasticities of oil supply and oil demand, as well as the two-way interaction between the US oil market and the global economy, advantage clearly lies in an oil market with a downward-sloping demand and upward-sloping supply curve.

There are limits to the United States’ key allies Saudi Arabia and the United Arab Emirates stepping up oil production in the short term, where Iranian oil could make a significant difference.

Moreover, the moment the sanctions get lifted and Iran’s compliance with any deal is certified, Tehran would not need to wait to boost output from oilfields to export more, as it could release crude in storage and forthwith help offset some of the pressure on oil prices caused by the slowdown in Russian supplies due to sanctions on Moscow.

Data firm Kpler estimates that Iran had 100 million barrels in floating storage as of mid-February, meaning it could add 1 million barrels per day (1MMb/d), or 1% of global supply, for about three months. 

A Reuters report in February said: “Iran is expected to ramp up its output following a deal too … to raise exports by 1 million to 1.3 million barrels per day.… Still, Iran’s crude in floating storage could hit the market quickly and Tehran has been moving it into place.… Iran has also moved some of its floating stocks of condensate from anchorage to its oil terminal on Kharg Island, in anticipation of imminent export.… Iran sits on the world’s fourth-largest oil reserves.” 

A new JCPOA deal would quickly bring Iran’s substantial oil reserves back onto global markets. Image: Twitter

EU foreign policy chief Josep Borrell’s journey to Tehran last week to meet and exchange notes confidentially with Iranian Foreign Minister regarding the fresh inputs from the US to break the logjam and kickstart the stalled nuclear talks testifies to the great anxiety in Europe to restore the JCPOA and access Iran’s oil as the best way to reduce its heavy dependence on Russian energy.

Clearly, there are profound implications for international security. According to reports, Tehran may no longer consider the removal of the Islamic Revolutionary Guard Corps from Washington’s list of Foreign Terrorist Organizations as central to the talks. If so, a potential deal-breaker is removed.

Equally, a close reading of the statement on Iran in the G7 Leaders’ Communiqué issued after their summit meeting (June 26-28) in Germany shows the Western powers’ dexterity to sidestep tendentious arguments and strike a conciliatory attitude on the whole – the statement’s moderate language, accent on diplomacy, absence of allegations of linking Iran with terrorism, encouragement of Iran’s normalization with Arab neighbors, and so on. 

Most important, Tehran has disclosed that the understanding with Borrell is that the negotiations in Doha will not be “about the nuclear aspect of the talks, because the nuclear issues have been closed once,” but will only pertain to the disputes that remain, including the lifting of sanctions.

To quote Iranian Foreign Ministry spokesman Saeed Khatibzadeh, “What is going to be negotiated in one of the Persian Gulf countries [read Qatar] is only about a few remaining issues in the field of lifting sanctions, so nothing will be added to the agreements reached in Vienna and nothing will be omitted.” 

Khatibzadeh concluded, “These talks are a continuation of the format that was in Vienna; that is, it will be conducted indirectly, and it is only about the quarrelsome issues [that have remained since the] last meeting in Vienna. We hope to see positive results. The ball is in Washington’s court. If it comes with an answer, be sure that the agreement can be reached quickly.” 

This article was produced in partnership by Indian Punchline and Globetrotter, which provided it to Asia Times.

M K Bhadrakumar is a former Indian diplomat. Follow him on Twitter @BhadraPunchline.