Iran May Renew Monitoring Pact If Nuclear Talks Progress

Iran May Renew Monitoring Pact If Nuclear Talks Progress

Iran said it may renew a key nuclear monitoring agreement with the International Atomic Energy Agency, potentially buying more time for world powers to broker an arrangement between Tehran and Washington to revive their 2015 atomic deal.

Mahmoud Vaezi, chief of staff for President Hassan Rouhani, said the extension of the temporary inspections pact with the IAEA will happen only if there’s progress at the current round of talks in Vienna over how to restore the nuclear accord, according to a statement on the Iranian government’s official website.

Vaezi said he hopes there will be “good news in the coming weeks” from the negotiations, and reiterated the parties have agreed on “many important economic issues,” without giving details. Rouhani, who helped broker the original deal, is keen to see it fully restored before August when he’s widely expected to be replaced by a hardline conservative following this Friday’s presidential elections.

Supreme Leader Ayatollah Ali Khamenei is due to give a televised speech at 7 p.m. in Tehran, and is likely to address the vote and possibly foreign policy.

Diplomats, led by the European Union, are in Vienna trying to iron out differences between Iran and the U.S. over some key outstanding issues preventing them from agreeing on a path back to the accord that had lifted sanctions on Iran’s economy in exchange for limits on its nuclear program.

The temporary pact with the IAEA, described as a “stopgap measure” by Director General Rafael Mariano Grossi, has already been renewed once. It is due to expire on June 24.

Iran has so far said that an agreement is in place with the U.S. to lift sanctions on its industries, including the energy sector, however Washington has continued to sound more cautious, warning that there is still a lot that remains unresolved.

Oil markets are closely watching the negotiations for signs of how soon the U.S. penalties are likely to be removed and how quickly OPEC-member Iran will ramp-up oil production and boost exports of crude.

Earlier on Wednesday, RBC Capital Markets said the nuclear deal could be restored by August, before Rouhani leaves office. They said the market could expect to see an additional 1 million barrels a day of Iranian oil by the end of this year.

Officials at the talks have said Iran’s election could complicate the negotiations, with hardliner Ebrahim Raisi, a cleric who’s deeply hostile to the West, widely expected to win office.

On Tuesday, Grossi told Italy’s La Repubblica newspaper that “everyone knows that, at this point, it will be necessary to wait for the new Iranian government,” when asked what stage negotiators had reached in their discussions.

Despite being opposed to engagement with the U.S., Raisi has pledged to preserve the deal if elected and implement it with a “strong government.”

While the president can set the tone and posture for the country’s attitude to the outside world, major foreign policy decisions ultimately lie with Khamenei, who has so far backed the nuclear talks on condition that the revived deal guarantees the effectiveness of U.S. sanctions removal and prevents a future U.S. administration abandoning it again.