Will there be a deal?

As negotiations continue, Yassamine Mather examines the intricacies of Middle East relations

The deadline for the current nuclear negotiations between the P5+1 powers and Iran is not until the end of June, yet discussions held this week in Geneva between Iranian and US ministers were significant - both sides are eager to claim some success before next week’s visit of Israeli prime minister Binyamin Netanyahu to Washington.

Secretary of state John Kerry and Iranian foreign minister Mohammad Javad Zarif were also trying to arrive at a statement of ‘political understanding’ and by all accounts some progress was made - probably enough to upset neoconservatives in the US Congress and Senate, as well as Netanyahu himself. The Israeli prime minister has made it clear he is opposed to any negotiations and is expected to use a speech to a joint session of the US Congress to reiterate his claim that the Islamic Republic is the biggest threat to world peace.

Netanyahu has already stepped up his rhetoric, saying it was “astonishing” that talks were continuing over what would be a “dangerous” deal. The invitation he received from House of Representatives speaker John Boehner to address both houses has already caused controversy in the US. In an unprecedented diplomatic snub both John Kerry and Barack Obama have made it clear they will not meet him during his visit to Washington.

According to columnist Steve Forbes - who calls Netanyahu “the Churchill of our time” for his constant warnings about the ‘danger to peace’ posed by Iran - Obama is attempting to “conclude a Neville Chamberlain-like deal with Tehran”. But pro-Israeli Democrats are concerned about the negative publicity Netanyahu’s visit is attracting. Some are considering boycotting his March 3 address, while others met last week with the Israeli ambassador, trying to convince him that the occasion should be postponed. However, Netanyahu is unlikely to back down. He is determined to speak as the representative of the “entire Jewish people”.

A week ago it was reported that US national security advisor Susan Rice had cut off contact with her Israeli counterpart, Yossi Cohen. US chief negotiator Wendy Sherman was quoted as saying that Rice will “no longer keep Israel informed”.1 While this was later denied by the US state department, there is no doubt that US-Israeli relations are at an all-time low.

By mid-week the Israeli prime minister faced more bad news, when it was revealed that the Israeli intelligence agency, Mossad, knew that Netanyahu’s claims about Iranian nuclear capability were false. In 2012, Netanyahu told the UN general assembly: “By next spring, at most by next summer, at current enrichment rates, [Iran] will have finished the medium enrichment and moved on to the final stage. From there, it’s only a few months, possibly a few weeks, before they get enough enriched uranium for the first bomb.”2 However, Mossad documents show that at the time of Netanyahu’s speech Israel’s intelligence agency had concluded that Iran was “not performing the activity necessary to produce weapons”.3

The previous week, the US had released a defence department report from 1987, which gave details of assistance provided to Israel in the development of its hydrogen bomb. In September 2014, the Institute for Research on Middle Eastern Policy had filed a lawsuit for the release of classified documents containing the details and a judge ruled that the Pentagon must comply with the freedom of information request. However, Israel’s supporters in the US claim Obama willingly declassified the documents and released them to a think-tank in order to damage Netanyahu.

The report, entitled ‘Critical technology assessment in Israel and Nato nations’, provides details of some of Israel’s nuclear facilities, comparing them to the Los Alamos and Oak Ridge National Laboratories, where US nuclear weapons were developed. The Israeli facilities “were advanced enough to formulate, design and build nuclear weapons”, reads the report. The Israelis were “developing the kind of codes which will enable them to make hydrogen bombs: that is, codes which detail fission and fusion processes on a microscopic and macroscopic level.”4

This is obviously not good news for a country that continues to deny its nuclear capability, has not signed the non-proliferation treaty and is not inspected by International Atomic Energy Agency officials. However, as far as the talks between Iran and P5+1 are concerned, it seems none of this matters. As both Obama and Iran’s supreme leader, Ali Khamenei, have said in the past few weeks, the main technical issues regarding Tehran’s nuclear capability have been resolved, and so current discussions are dealing with wider political issues. However, both leaders are publicly pessimistic about the outcome of the current negotiations - either that or they are preparing their population for the worst-case scenario.

Strategic interests

On the face of it, the two countries, confronting a common enemy in the shape of Islamic State, need each other more than ever before. However, it is clear that, for all the current animosity between Obama and Netanyahu, US strategic interests in the region lie with Israel, Saudi Arabia and Turkey - countries that consider Iran’s policies to be expansionist and a major threat to their stability.

Saudi Arabia claims it is concerned about Iran’s influence in Iraq, Syria and Lebanon, while continued unrest amongst Shias in Bahrain have made the situation far worse. Over the last few years Bahrain has accused Iran’s Revolutionary Guards of providing opposition fighters with explosives training in order to carry out attacks. Last week Iran retaliated by claiming Bahrain was arming and funding forces opposed to the Islamic Republic inside its borders.

Then there is Yemen. Shia Houthis took control of the Yemeni capital, Sana’a, in September 2014 in what Saudi Arabia called a “coup against constitutional legitimacy”. The Houthis dismissed the president, dissolved the parliament and established a transitional council, while anti-Houthi forces have staged demonstrations and protests in what is seen by many as one of the scenes of confrontations between Iran and Saudi Arabia. No-one in the region doubts Iran’s role in Yemen, yet surprisingly there is very little news of it in the mass media. However, on February 24, John Kerry claimed that Iran’s support for Shi’ite rebels in Yemen “contributed” to the militia’s takeover of the Yemeni capital and the collapse of the government. He added: “But I do know that the Iranians were surprised by the events that took place and are hoping to see a national dialogue take place.”5

This conciliatory statement is a reflection of US confusion over the region. On the one hand, it wants a resolution to the long conflict with Iran, but, on the other, it needs to maintain its support for Saudi Arabia. Opposition to IS has brought the US and Iran closer together and finding a resolution to the conflict with Iran would be seen as a historic foreign policy achievement for Obama. Yet the US administration also needs to maintain good relations with Saudi Arabia and keep Israel content.

For its part, Iran is now desperate for a deal. Sanctions have crippled the country’s economy and Iranians had hoped that nuclear talks would bring about an easing of sanctions and see it recover from a minus rate of growth. However, Iran’s total reliance on the sale of oil means the economy is facing disaster, as the price of oil collapses. The government of Hassan Rowhani has been working on its budget for the new Iranian year 1393-94. The first draft, prepared before Christmas, was based on an oil price of $72 a barrel, but the current price is $50.

Although negotiations are continuing, many firms have seen a renewal of European and US sanctions. In mid-February, the European Union reinstated sanctions on the National Iranian Tanker Company. These had been lifted in July, when the company argued it was a privately owned enterprise. However, the EU decided the company has close links with the Iranian government and overturned last summer’s decision.

In addition, large sections of the working class have not been paid for months. In early February around 1,000 workers from Safa Rolling and Pipe Mills came out on a three-day strike, demanding that the company pay wages owed for the last four months and workers’ insurance for well over a year. Even those who have been paid are seeing their living standards fall. Last week nurses went on strike and held a protest outside the offices of the Iranian president, highlighting the disparity between doctors’ and nurses’ pay. Some medics have benefited from 400% pay rises, while nurses’ wages have remained static.

So it is not surprising that, with the exception of small, ultra-conservative groups, everyone inside Iran is hoping the nuclear deal will succeed and that this will improve the economic situation. Ayatollah Khamenei has gone out of his way to make positive comments about the negotiations, reiterating his ‘confidence’ in the foreign ministry team. Having said that, last week Iran’s supreme leader said that if the negotiations continue “on the basis of what [foreign powers] dictate”, sanctions would not be lifted: “The enemy is going to use the weapon of sanctions to the hilt because their goal is to stop the progress of our people.”

As the negotiations enter a crucial stage, Khamenei has spoken out against what he has called a solution in two phases, in which a deal would be reached, but sanctions would stay in place for an interim period. He has proposed one single agreement instead of multiple deadlines. A month earlier, the supreme leader had said Iran’s opponents were “greedy” and that any agreement must be based on a lifting of all sanctions. However, Iran would challenge any continuation of sanctions by further developing its own economy, and would try to turn the tables when it came to “isolation and mismanagement”. So what does the supreme leader propose? Sanctions against the west: “Iran has the world’s most gas and oil, and if need be Iran can hold back gas that Europe and the world is so dependent on.”6

Someone should remind Khamenei that the price of oil is falling - partly because of US shale oil, and partly because Libyan oil has returned to the market. This has pushed up supply at a time when the European, Chinese and,  by extension, the world economy is facing a slowdown: more supply, less demand. Under such circumstances it is difficult to see how oil sanctions imposed on western powers would help Iran’s economy or achieve political victory.

As for the policy of refusing to sell Iranian gas to Europe, this remains for the time being a figment of the supreme leader’s imagination. For Iran to do so at competitive prices, it would need a pipeline across areas of the Middle East that are currently war zones. The alternative method is to liquefy gas and export it in that form. That would be a very expensive endeavour and unlikely to benefit Iran’s economy through the regular sale of gas - never mind after the Islamic Republic has imposed the retaliatory sanctions proposed by the supreme leader.

The reality is that, for all the talk of political independence and building “resistance economy”, Iran remains a single-product, rentier capitalist state, at the mercy of world powers. No amount of rhetoric will change that fact.



1. http://thejerusalemconnection.us/blog/2015/01/29/netanyahu-churchill-time-must-speak-congress.

2. www.latinospost.com/articles/4677/20120927/netanyahu-un-general-assembly-2012-speech-transcript-video-iran-palestine-nuclear-obama.htm.

3. www.aljazeera.com/news/2015/02/leaks-netanyahu-misled-iran-nuclear-programme-guardian-iran-nuclear-speech-2012-150218165622065.html.

4. http://economictimes.indiatimes.com/news/international/world-news/iran-contributed-to-collapse-of-yemen-government-us-diplomat-john-kerry/articleshow/46360830.cms.

5. http://economictimes.indiatimes.com/news/international/world-news/iran-contributed-to-collapse-of-yemen-government-us-diplomat-john-kerry/articleshow/46360830.cms.

6. www.pressreader.com/usa/arkansas-democrat-gazette-northwest-edition/20150219/281522224528884/TextView.