UPDATE, JUNE 17:

Amid reports of a possible US-Iran “understanding” over Tehran’s nuclear program, Tehran’s oil exports and output have reached their highest point since 2018, when the Trump Administration imposed comprehensive sanctions.

Iran;s crude exports passed 1.5 million barrels per day in May, and output is more than 3 million bpd.

Despite the increased exports — much of which has gone to China — Iran’s sales are still 40% below the 2.5 million bpd at the start of 2018.

ORIGINAL ENTRY, JUNE 16: The US and Iran are moving towards an “understanding” over Tehran’s nuclear program, more than five years after the Trump Administration withdrew from the 2015 deal between Iran and the 5+1 Powers (US, France, Germany, Italy, UK, China, and Russia).

Iranian and Western officials say the discussions, brokered by Oman, would put limits on Iran’s enrichment of uranium and release some American political prisoners held in Tehran. In return, some Iranian assets held abroad would be unfrozen.

Iran’s Raisi Government, carrying out the directions of the Supreme Leader, had stalled talks since March 2022. Initially, Tehran objected to the US designation of the Islamic Revolutionary Guards Corps as a “foreign terrorist organization”. Then Iran put up barriers to inspections by the International Atomic Energy Agency of nuclear facilities, withholding video and removing cameras.

But in March, Iranian and European diplomats met in Norway to seek an easing of tensions. Biden Administration envoy Rob Malley had several discussions with Iran’s Ambassador to the UN, Amir Saeid Iravani. Oman then hosted indirect talks between US National Security Council official Brett McGurk and Iran’s chief nuclear negotiator, Deputy Foreign Minister Ali Bagheri Kani.

Last Sunday the Supreme Leader said he was open to a nuclear agreement if the “infrastructure of our nuclear industry should not be touched”.

Framing The “Understanding”

Any US-Iran accord will be framed as an “understanding” rather than an agreement to avoid review and possible rejection by the US Congress.

An Iranian official said, “Call it whatever you want, whether a temporary deal, an interim deal, or a mutual understanding — both sides want to prevent further escalation.”

The official said the initial understanding will involve “prisoner exchange and unblocking part of Iran’s frozen assets”. Subsequent steps could include Tehran’s halt of enrichment of 60$ uranium, which can potentially be further enhanced to military-grade 90%, and cooperation with the IAEA’s inspectors in return for waivers of US sanctions.

A Western official confirmed the goal of ensuring that Iran does not enrich uranium to 90% purity, with more Iranian cooperation with the IAEA and halting the installation of more advanced centrifuge. There would then be a “substantial transfer” of Iranian funds held abroad.

State Department spokesman Matt Miller denied any deal while saying the US wants Iran to curb its nuclear program; cease support for regional proxy groups that carry out attacks; halt its support, including supply of attack drones, for Russia’s invasion of Ukraine; and release US political prisoners.

“We continue to use diplomatic engagements to pursue all of these goals,” Miller said.

Under the 2015 nuclear deal, Iran limited its uranium enrichment to 3.67%, transferring its 20% stock abroad. However, after the Trump Administration’s withdrawal from the agreement and imposition of comprehensive sanctions in November 2018, Tehran resumed production of 20% uranium and soon raised the level to 60%.