Iranian Foreign Minister Javad Zarif and lead negotiator Abbas Araqchi have dismissed the likelihood for a signed deal this week, citing more issues to be hammered out before all necessary signatories will be gathered to formalize the deal. The key item to look for, according to Zarif, was when all foreign ministers of the P5+1 powers (Britain, France, Russia, China, the US, plus Germany) would be flown to Lausanne to sign. Negotiators are pushing for the International Atomic Energy Agency inspectors to be allowed to search through the country freely in order to screen their uranium mills and mines, which would definitely determine whether Iran was trying to siphon off materials to use covertly in weapons production.
Iran still denies any such siphoning is occurring, and that all nuclear development is related to civilian purposes such as producing energy and medical isotopes. Challenges remain however – particularly in the US Congress, where President Obama is urging Senate democrats not to sign on to a Republican bill that would require Congress to approve the terms of any deal. In recent days there has been much speculation as to what will happen to Iran when the sanctions are lifted and the floodgates open for its energy markets.
A recent article in the WSJ noted that if Iran begins flooding the market with oil, it may once again dent the price of oil benchmark index Brent crude. Some are betting on a further decline and others wonder if this creates a perverse short term incentive for Russia to torpedo any deal in order to keep the price of its main source of government revenue at its current levels and not tolerate any further price disruptions. However, Iranian Oil Minister said that the country’s oil supply would not disrupt markets. Some Western observers back this up, citing lack of fast delivery technologies and enhanced oil recovery techniques.
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- US auto manufacturer General Motors has decided to close a Russian assembly plant indefinitely and halting the sale of many of its products in that market, part of strategy that it says is aimed at devoting capital to ventures that carry less risk. Industry volumes for the auto industry in Russia were reduced by 10% in 2014. Surprisingly, it is Russian internal regulations enacting high production and local-sourcing quotas that made the project too expensive to maintain in a recession, soft-ruble environment.
- Russia has condemned the Kiev Parliament today for passing two bills determining the autonomy of the separatist-held eastern bloc region of Donetsk, which Russian Foreign Minister Sergei Lavrov called a “gross violation” of the Minsk II Accords. Lavrov objected primarily to holding of local elections with international monitoring under the aegis of Kiev. This was tantamount, according to Lavrov, of Kiev wanting to replace all previously elected officials in Donetsk.
- Turkmenistan has offered to host Afghan peace talks with the Taliban. The Ambassador cited the role his country held hosting warlords Burhanuddin Rabbani, Abdul Rashid Dostam, and Ismail Khan. He added that even the Taliban had sent negotiators to Turkmenistan in the past. Several countries, including China, have offered to host the peace talks. The Ambassador also cited that the TAPI pipeline may not be realized without peace in Afghanistan.
- TAPI construction costs are estimated to exceed $7.5 billion, according to Azernews and a preliminary feasibility study performed by the Indian Ministry of Petroleum and Natural Gas. The pipeline itself will be roughly 1,814 kilometers. Roughly 735 of those kilometers will go through southern Afghanistan and the Kandahar valley, one of the most violent zones of conflict in the current civil war.
- The Heads of infrastructure and railway ministries of Azerbaijan, Uzbekistan, and Georgia held a trilateral meeting in Tashkent where they agreed on developing an international railway corddior that will connect its rail network to the China-Kyrgyzstan-Uzbekistan railway agrea, and will provide a point of access for cargos of the Black Sea through Azerbaijan and Georgia.
- The EU has come to a larger agreement after months of debate regarding further Russian sanctions. EU Leaders agreed that when the heads of government meet again in June or July, they will likely extend the economic sanctions on Russia through at least the end of 2015. They deferred all decisions on extending sanctions until then, likely in an effort to keep the diplomat door open with Russia regarding the crisis in Ukraine.