U.S. Won’t Ease Oil Sanctions at Iran Nuclear Talks

Negotiators headed to Baghdad for a second round of talks on Iran’s nuclear program won’t be giving Iran the relief it’s seeking from oil and financial sanctions, according to Obama administration officials and Western diplomats.

At the same time, the U.S. and the five other major powers that will participate in talks with Iran on May 23 -- the U.K., France, Germany, China and Russia -- have agreed on confidence- building measures they may offer in response to Iranian concessions, said several U.S. officials and Western diplomats who spoke on condition of anonymity because of the sensitivity of the issue.

U.S. and European Union sanctions aimed at the No. 2 producer in the Organization of Petroleum Exporting Countries are crippling Iran’s ability to export and get paid for crude oil, its leading revenue source. The U.S. and EU are in no hurry to ease the pressure before a deal is done, Obama administration officials and Western diplomats said.

The six nations are willing to offer something: assistance to Iran’s civilian nuclear program and an easing of restrictions that have blocked Iran from getting spare parts for civilian aircraft, four U.S. officials said.

“This is a reciprocal process. It’s very difficult for the U.S. to get an Iranian concession now and give a U.S. concession in three months,” said Trita Parsi, author of “A Single Roll of the Dice: Obama’s Diplomacy with Iran.”

“In order for them to get something, they have to give something,” Parsi said.

Enriched Uranium

U.S. State Department officials said the offer would be similar to a failed 2009 plan to take Iran’s stockpile of 19.75 percent enriched uranium and process it into fuel rods that would be sent back to Iran for use in the Tehran Research Reactor, which makes medical isotopes.

While medium-enriched uranium is needed to make medical isotopes to treat cancer patients, it also can be enriched further to weapons-grade levels. The international community wants Iran to halt its 19.75 percent enrichment and ship out its stockpiles -- steps that Iranian officials have signaled in recent weeks they are willing to consider.

EU foreign policy chief Catherine Ashton has said the six nations engaged in talks hope Iran will offer concrete proposals responding to concerns that its nuclear program is a cover for a weapons effort. U.S. officials and Western diplomats said no one expects Iran will immediately address all concerns about its nuclear activities.

Additional Sanctions

U.S. financial sanctions on nations that fail to reduce significantly their imports of Iranian oil will go into effect on June 28 as planned, as will a July 1 oil embargo blocking Iranian crude from entering the EU, the officials said.

Obama administration officials said their position is firm and united with the other five nations that will be at the table in Baghdad: that Iran answer all concerns about possible weapons development, open suspect sites to intrusive inspections and come into full compliance with the Nonproliferation Treaty and UN resolutions.

While Iranian officials have claimed in state-run media reports that the international community has accepted Iran’s right to enrich uranium, U.S. officials and Western diplomats say the six nations are demanding a halt to all domestic enrichment by Iran.

Tough Bargaining Position

Three Obama administration officials and two Western diplomats said no decision has been made on whether a lower level of uranium enrichment, 3.5 percent, might be acceptable if Iran were to comply with the nonproliferation treaty and allow full transparency that would dispel international worries about a covert atomic bomb program.

Iran would have to demonstrate significant verifiable concessions before the U.S. and European Union would consider easing penalties that have crippled Iran’s ability to export oil, the officials said.

Parsi, president of the National Iranian American Council, said in an interview that he believes the administration is maintaining a tough bargaining position to strengthen its hand both with Iran and with Congress, which has taken a hard line on sanctions and is likely to oppose any softening of the penalties.

“Instead of presenting a hypothetical American concession in return for a hypothetical Iranian concession, the White House is keeping quiet publicly,” he said. “They’ll go to table, and then come back to Congress and say this is what we got. If they get something significant, it’s easier to spin it as a win and not focus on what they give away.”

To contact the reporter on this story: Indira A.R. Lakshmanan in Washington at ilakshmanan@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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