World Powers, Iran Near Deal on Staggered Return to Nuclear Pact

(Bloomberg) -- World powers are close to an agreement with Iran on a sequenced return to the 2015 nuclear accord to be implemented over a period of months, with relief for reeling global oil markets unlikely to come overnight.

Negotiators are finalizing a timeline for reactivating the agreement, which will begin with minimal measures by both sides while the Biden administration puts the plan before Congress, which will eventually need to approve relief on oil sanctions, two people familiar with the talks said, declining to be named as the details have yet to be made public. A deal could be announced within days.

A European official with knowledge of the negotiations said it would take a couple of months from agreement for Iranian oil exports to resume.

Negotiators have blown through previous time limits during more than 10 months of talks in Vienna. But officials speaking both on and off the record in recent days have said an agreement could be reached after the head of the International Atomic Energy Agency, Rafael Mariano Grossi, returns from a visit to Tehran scheduled for Saturday.

The IAEA, the world's nuclear watchdog, convenes its next board meeting on March 7, when any solution proposed by Grossi could be finalized.

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Iran has demanded the International Atomic Energy Agency conclude its stalled investigation of past nuclear work as part of any deal to reactivate the agreement, which imposed curbs on Iran's nuclear work in return for sanctions relief. The pact was championed by U.S. President Barack Obama and unilaterally abandoned by his successor, Donald Trump, in 2018.

With U.S. sanctions tightening around its economy, Iran wound down its own compliance over the past four years and has since enriched uranium close to the levels needed for a bomb. The agency has been probing the source of uranium particles detected at several undeclared locations in Iran.

Western negotiators have said they can't agree to close the probe because the IAEA works independently. But Grossi signaled Thursday in an interview with Bloomberg Television that while a “number of issues” need to be clarified before he can end the inquiry, a deal might be achieved.

Mikhail Ulyanov, Russia's envoy, said the sides were “on the finish line” with a deal now possible within 48 hours. The U.K. also said Thursday that a final agreement was “very close.” Other diplomats with knowledge of the Vienna talks said privately they expected a breakthrough early next week.

Iran sounded a more cautious note late Thursday, however, with foreign ministry spokesman Saeed Khatibzadeh warning on Twitter that “premature good news” was no substitute for a good agreement.

Iran's Foreign Minister Hossein Amirabdollahian said in a statement earlier on Friday that he would travel to Vienna to mark the deal's finalization “once the West agrees to our red lines” suggesting that much still hinges on Grossi's visit.

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Iran insists its nuclear program is entirely peaceful but Western concerns it might try to develop warheads drove diplomacy that culminated in the 2015 deal.

Reviving the seven-year-old landmark nuclear agreement with Iran, often referred to as the JCPOA, would mean relief for global energy markets and could help lower tensions around the Persian Gulf where Iran's standoff with the U.S. helped fuel conflict.

This week oil surged as high as $119 a barrel after Russian invaded Ukraine and other oil-producing nations, including members of the OPEC+ group, are reluctant to significantly increase production.

Traders have been expecting a return of Iranian barrels to global markets this year. The Persian Gulf nation, which holds the world's No. 2 natural gas and No. 4 crude reserves, could probably raise exports by around 1 million barrels a day within months of any deal coming into full effect, according to traders.