He added that the oil industry would be able to add 500,000 barrels per day to its output within just the first days after the implementation of the agreement. Zanganeh reportedly anticipates the addition of a further 500,000 on top of this, early in the life of the deal.
Iran has a long history of disseminating propaganda, including reports that deliberately understate the impact of the economic sanctions that are widely credited with crippling the Iranian economy and forcing it to the nuclear negotiating table. Thus, projections by Zanganeh and other officials must always be taken with a grain of salt.
However, independent analysis of Iran’s post-sanctions prospects come reasonably close to Zanganeh’s projections, anticipating possible output growth of nearly three quarters of a million bpd in the first months of the new arrangement. These expectations are helped along by the eagerness of a number of Western entities to invest in and purchase from the Iranian oil economy, as well as other Iranian import/export markets.
This trend was very much on display early this week following the mutual reopening of the Iranian and British embassies in each other’s capitals. British Foreign Secretary Phillip Hammond has used the occasion as an opportunity to praise a policy of rapprochement and to urge the exploration of new financial investments and business dealings.
A report by Reuters on Tuesday quoted Hammond as acknowledging that US sanctions remain in place against Iran for the time being, thus preventing actual business deals from going forward. But he added that this does not prevent British entities from exploring forthcoming possibilities and beginning to negotiate deals that could go into effect in the coming months.
Hammond said that he expects sanctions to be lifted by early spring and that restrictions might begin to be removed in stages as early as October. But even the eventual lifting of US sanctions is still not a foregone conclusion, as American implementation of the Joint Comprehensive Plan of Action still faces a long fight in the US Congress.
A resolution of disapproval for the nuclear deal faces a congressional vote by September 17. It is expected to pass, although it will be vetoed. There is an outside chance of that veto being overridden but even if it is not, further congressional action could weaken implementation of the agreement or give a future president the political cover he needs to re-impose sanctions. These possibilities make for a comparatively uncertain investment situation in Iran, and may be mitigating factors in the growth of Western desire to rush into that market.
The threat of future US sanctions enforcement was cited in a report by RT on Tuesday regarding the fact that British oil company BP did not participate in the trade delegation that accompanied Foreign Minister Hammond to Tehran this week. A BP spokesperson said, “Sanctions are still in place and we will not do anything while that is the case. We are monitoring the situation and will take a look at the opportunities.”
Part of that situation is sure to be the nature and severity of ongoing opposition to the nuclear deal within the US Congress and American political discourse. As of now, there is no sign of this opposition diminishing. Indeed, recent points of focus in the debate have arguably given new ammunition to opponents in making their case.
Much has been made of reports that Iran will be permitted to manage its own inspections of the Parchin military base, believed to be at the center of many of the past military dimensions of the Iranian nuclear program. Members of Congress have used this to redouble their insistence that the International Atomic Energy Agency reveal the text of so-called side-deals between it and Iran. The IAEA has refused, citing legal requirements.
But what is sure to enhance American skepticism on this point is the extent to which Tehran has pushed back on the issue of transparency, insisting and by some accounts threatening the IAEA not to reveal details of their bilateral agreements.
The Wall Street Journal on Tuesday reported upon the latest such efforts, adding that IAEA Director General Yukiya Amano assured American critics that the Parchin inspections regime would not be a model for other inspections elsewhere in Iran. But this statement appeared to implicitly acknowledge that Western concerns over the Parchin inspections were in at least some measure justified.
While these concerns could lead to a threat of new US sanctions enforcement, this threat is not the only concern for foreign investors. RT notes that even if the nuclear-related sanctions are fully removed, others will remain and this will make it tricky to do business in Iran. The extent to which this threatens foreign investment may depend on Iran’s own behavior, and it is possible that this is another aspect of the situation that companies like BP are examining.
Non-nuclear US sanctions continue to be directed at persons and entities associated with Iran’s support for global terrorist groups and its domestic record on violations of human rights. Supporters of the nuclear agreement have suggested that a trend of moderation on these issues might emerge out of increased engagement between Iran and the world community. But thus far, there has been no real evidence of a move in that direction.
IranWire has reported that last week ten drug smugglers were executed in Iran in a single morning. This reflects Iran’s longstanding use of executions against crimes that do not meet clear international standards for when such killings are even arguably justified. Activism on this issue has increased in recent months as human rights defenders have called attention to a surge in the number of such executions in Iran, which is on track to let the Islamic Republic greatly exceed 1,000 judicially-sanctioned killings in the current calendar year.
At the same time that issues like this provide the West with reasons to maintain economic and diplomatic pressure on Iran in spite of the nuclear deal, many Iranian officials have continued to make anti-Western statements that could cut against the trend toward rapprochement. The Tower notes, for instance, that Hossein Sheikholeslam, a senior advisor to the speaker of the Iranian parliament, responded with hostility to Hammond’s visit, saying that Iran would never forget Britain’s colonial past.
Sheikholeslam also repeated Iran’s longstanding calls that “Israel should be annihilated,” and thus further cause for concern to those Western figures who believe that the nuclear agreement and further Western investment in Iran will cause much more money to be delivered into the hands of Hezbollah, Hamas, and other anti-Israeli terrorist groups.