The landmark Iranian nuclear deal will go into effect this
weekend, Western and Iranian officials said, triggering the lifting
of sanctions and reshaping the political and economic landscape in
unpredictable ways across the Mideast and beyond.
The United Nations' nuclear watchdog agency in Vienna was
expected to certify by Saturday that Tehran has met its commitments
under the July accord with global powers to significantly scale
back its nuclear program, according to these officials.
In return, most Western sanctions on Iran will start to be
repealed, sending tens of billions of dollars in frozen Iranian oil
money back to Tehran and opening world markets to hundreds of
thousands of barrels of Iranian petroleum.
The White House says the implementation of the agreement would
be a major advance in the U.S. campaign to stop the spread of
nuclear weapons. But its also poses major security and diplomatic
risks for the U.S. and its close Mideast allies, such as Israel,
Saudi Arabia and the United Arab Emirates, according to regional
diplomats and analysts.
"Every country in the world is worried about this," said Saudi
Foreign Minister Adel al-Jubeir in London on Thursday, referring to
the return of frozen assets. "The concern in most countries in the
world is that Iran not use these funds in order to fund
destabilization activities, but instead use the funds to improve
the well-being of its people."
Iran and Saudi Arabia are in an escalating conflict marked by
proxy wars in Syria, Iraq and Yemen. Arab diplomats fear the
unshackling of Tehran's economy will allow Iran's theocratic
leaders to play an even more assertive role in their region.
American officials have voiced optimism the deal could breed
stronger relations between Washington and Tehran after four decades
of enmity, sparked by the 1979 Islamic revolution and the taking of
hostages at the U.S. embassy there.
"All parties have continued making steady progress toward
implementation day of the [agreement], which will ensure the
exclusively peaceful nature of Iran's nuclear program," State
Department spokesman Mark Toner said Friday.
An Iranian negotiator, Hamid Baeidnejad, tweeted Friday that
"the landmark agreement is on the way."
To mark the expected milestone, Secretary of State John Kerry
will visit Vienna on Saturday, according to U.S. officials, where
he will meet his Iranian counterpart, Javad Zarif, and the European
Union foreign policy chief, Federica Mogherini.
In recent weeks, however, Iran has shown its intent to continue
challenging the U.S. and its allies for influence, regardless of
the nuclear deal.
Tehran has test-fired two ballistic missiles in violation of
U.N. resolutions since October, according to U.S. officials. This
week, Iran briefly detained 10 American sailors whose small boats
had wandered into Iranian waters.
A group of 13 Republican senators, including presidential
candidate Ted Cruz, wrote to President Barack Obama on Friday
expressing concern that "Iran's belligerent actions have thus far
gone unpunished," saying that would invite further
transgressions.
Opposition to the agreement in the U.S. stems in part on Iran's
continued detention of at least four American citizens, some for
more than four years, on dubious or unspecified charges. They
include a former U.S. marine and a Washington Post staff member. A
fifth American has been missing in Iran and has not been accounted
for.
The sanctions imposed on Iran by the U.N. Security Council will
be automatically lifted when the International Atomic Energy Agency
informs the Council of its final report that Iran has met its
obligations. A snap-back mechanism allows the U.N. to reimpose
sanctions if Iran violates the deal in the next decade.
European and Asian companies are eager to enter an Iranian
market of 80 million people with huge oil and gas reserves and an
educated and youthful population. U.S. companies largely will
remain barred from returning to the Iranian market due to
unilateral American sanctions.
Both the U.S. Treasury Department and European Union say they
will release new guidelines for investing in Iran soon.
Expectations that sanctions against Iran's oil exports will be
lifted helped fuel a sharp drop in the global price of crude oil,
which fell below $29 per barrel this week—the lowest in more than a
decade.
Iranian oil officials have said they're preparing to increase
their oil exports to Asia and Europe by 500,000 barrels a day in
the coming weeks and by one million by the end of the year.
"The lifting of sanctions could not have come at any worse time
for the oil market, and could therefore potentially drive prices
further down," Frankfurt-based Commerzbank AG said in a report this
week.
Iranian officials concerned about the cheap price said they are
considering bartering their oil for goods, while also looking to
invest in foreign refineries to lock in buyers.
Mr. Obama has made the Iran nuclear agreement his signature
foreign policy initiative and has aggressively pursued diplomacy
with Tehran since 2009.
Iran, as part of the agreement, has significantly scaled back
its nuclear infrastructure in recent weeks. This has included
shipping 25,000 pounds of enriched uranium to Russia, converting a
heavy-water reactor to produce less plutonium, and taking off line
thousands of centrifuge machines used to produce nuclear fuel.
Mr. Kerry has said this will push back the time required for
Iran to produce a nuclear weapon to a year, from just months before
the deal. Tehran denies it is seeking atomic weapons.
Opposition to the Iran deal in the U.S. Congress, and among
Washington's Mideast allies, however, remains intense. U.S.
lawmakers in recent weeks have drafted legislation aimed at
imposing new sanctions on Iran for its ballistic-missile tests and
its support for terrorism.
Iranian officials have said such sanctions would violate the
nuclear agreement, and Mr. Obama has pledged to veto them.
European and Asian companies have said the uncertainty about
future U.S. policy toward Iran, and potentially more sanctions, has
made plans for investment in the country difficult.
Some Republican presidential candidates have pledged to pull out
of the agreement if elected later this year. Democratic
presidential front-runner Hillary Clinton has vowed to vigorously
enforce it.
Business officials and people familiar with talks said they
expect that major long-term investments and contracts from the West
could take months to emerge, with many firms likely to wait until
2017.
European firms like Total SA of France and Eni SpA of Italy have
visited Iran in recent months to rekindle ties.
U.S. companies are still consulting the government and lawyers
to assess the conditions they could be allowed to Iran. Some are
considering setting up separate companies abroad that will allow
them to do business with Iran.
For example, Exxon Mobil Corp. has contacted professionals
familiar with Iran's oil industry to map a "who's who" of its
decision makers, according people familiar with the matter. The
company declined to comment.
"We've seen U.S. companies engaging in a cautious study of what
may become possible if and when sanctions against Iran are
reduced," said Eric Shimp, policy adviser at U.S. law firm Alston
& Bird. But for now, "we're looking at an uncomfortable stay in
limbo for U.S. industry interested in Iran."
Europe was Iran's biggest trade partner before the sanctions
noose tightened in 2012. EU goods trade with Iran fell to €11.7
billion in 2014 ($12.8 billion), down from close to €28 billion in
2011, according to the bloc.
Laurence Norman in Brussels, Benoî t Faucon in London and
Timothy Puko in New York contributed to this article.
Write to Jay Solomon at jay.solomon@wsj.com
(END) Dow Jones Newswires
January 17, 2016 20:25 ET (01:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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