Failure to Reach Iran Deal Gives Opponents Time to Lobby

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Hassan Rouhani, Iran's president, answers questions during an Asia Society event in New York, Close

Hassan Rouhani, Iran's president, answers questions during an Asia Society event in New York,

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Photographer: Emmanuel Dunand/AFP/Getty Images

Hassan Rouhani, Iran's president, answers questions during an Asia Society event in New York,

Iran and world powers failed to reach a deal limiting the Islamic Republic’s nuclear program, creating an opening for Israel, Saudi Arabia and other opponents to lobby against the first-step plan before negotiations resume in 10 days.

High-ranking diplomats from seven nations fell short of an accord in talks that stretched into a fourth day in Geneva. A next round has been scheduled to begin Nov. 20, the European Union foreign policy chief, Catherine Ashton, said today.

French Foreign Minister Laurent Fabius yesterday raised concern that not enough restrictions had been imposed on Iran’s partially-built Arak heavy-water reactor or the country’s stockpiles of enriched uranium and capacity to make more. He told reporters early today that more work is needed.

U.S. Secretary of State John Kerry later said, “I feel very confident that this can be done. I’m not going to tell you it will be -- but I can tell you it absolutely can be -- with good effort over these next days.”

The pause gives opponents in Israel, Saudi Arabia and Washington time to lobby against any deal that would let Iran keep sensitive nuclear technologies and to press for new sanctions. After a stop in Abu Dhabi later today, Kerry intends to fly back to Washington to brief lawmakers and try to head off further congressional penalties that President Barack Obama’s administration says could scuttle an accord.

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U.S. Secretary of State John Kerry consults his mobile phone prior to a meeting on Iran's nuclear programme in Geneva Switzerland, on November 9, 2013. Close

U.S. Secretary of State John Kerry consults his mobile phone prior to a meeting on... Read More

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Photographer: Jason Reed/Pool/AFP via Getty Images

U.S. Secretary of State John Kerry consults his mobile phone prior to a meeting on Iran's nuclear programme in Geneva Switzerland, on November 9, 2013.

Frozen Assets

The agreement being weighed in Geneva would have offered Iran a temporary easing of the sanctions on petrochemicals, gold and auto trade and some access to frozen assets, according to diplomats who asked not to be identified because they weren’t authorized to speak.

“Members of Congress who genuinely seek a verifiable freeze and rollback of Iran’s nuclear program must refrain from actions that tie the hands” of the powers negotiating with Iran, said Daryl Kimball, executive director of the Arms Control Association in Washington. “Neither side can or will get everything it wants,” he said, and “in the absence of a negotiated solution, Iran’s capabilities to produce material for nuclear weapons will only improve.”

Oil Prices

Brent crude, the benchmark for more than half of the world’s oil, and West Texas Intermediate, the U.S. marker, both may gain. Brent climbed 1.6 percent to $105.12 a barrel Nov. 8 on the London-based ICE Futures Europe exchange after Kerry tempered expectations of an accord. WTI rose 0.4 percent to $94.60 on the New York Mercantile Exchange.

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French Foreign Minister Laurent Fabius said that Iran’s reluctance to suspend construction of its Arak heavy-water reactor remained one sticking point along with reducing stockpiles of 20 percent enriched uranium. Close

French Foreign Minister Laurent Fabius said that Iran’s reluctance to suspend... Read More

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Photographer: Fabrice Coffrini/AFP via Getty Images

French Foreign Minister Laurent Fabius said that Iran’s reluctance to suspend construction of its Arak heavy-water reactor remained one sticking point along with reducing stockpiles of 20 percent enriched uranium.

“You’ll probably see some boost to oil prices, maybe a couple dollars a barrel,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone yesterday. “If it appears that they can’t reach a collegial agreement, and it’s not just the belief that they need a little more time, you’d expect a lot higher boost in prices, around $4 to $5 a barrel.”

Iran's Uranium Enrichment

Iran’s oil output has fallen 16 percent since the U.S. and the European Union tightened sanctions in July 2012. An agreement probably would have reduced prices. Brent would slide below $100 a barrel if the Iranian oil curbs were loosened, according to the mean of 19 trader and analyst estimates compiled by Bloomberg on Oct. 14.

‘Same Wavelength’

The inconclusive outcome today also gives hardliners in Iran an opportunity to urge the country’s supreme leader, Ayatollah Ali Khamenei, to prevent negotiators from conceding too much. On the second night of talks, Khamenei posted a message of support on Twitter for Iranian Foreign Minister Mohammad Javad Zarif and his negotiating team, calling them “sons of the revolution.”

Comments posted on Khamenei’s account today said France has been “openly hostile” in recent years.

Zarif today told reporters that differences among the parties were to be expected and that he was pleased all were “on the same wavelength.”

In a separate briefing, Zarif declined to fault the French foreign minister for raising the issue of the plutonium reactor or obstructing a deal.

“We were discussing nuclear issues and for a country to bring up heavy water is not strange,” Zarif said. “We don’t want anyone to think we are after nuclear weapons.”

Before departing from Geneva today, Zarif wrote on his Facebook account that an accord had been near, though “it was necessary for all to be on board.”

Two Paths

“As you’ve heard from ministers’ official comments, one of the members had some issues,” Zarif said.

Yesterday, Fabius had said in a France Inter radio interview, “We want an agreement, but not a fool’s bargain.”

Nuclear weapons can be made with highly enriched uranium, which Iran is already capable of producing, or plutonium extracted from spent-fuel used in heavy water reactors such as Arak.

While Iranian officials have told United Nations monitors that they would postpone operation of the Arak reactor, they wouldn’t agree at technical discussions in Vienna last week to shut it or convert it into a light-water reactor. That raised concern among the six nations negotiating with Iran, according to a Western diplomat who asked not to be identified because of the talks’ sensitivity.

‘Serious Concern’

“Any reactor of that particular type is a serious concern,” Robert Kelley, a U.S. nuclear engineer who led UN investigations of Iraq’s nuclear program, said in an interview. At the same time, he said, the facility can be adequately monitored and Iran hasn’t shown any intent to extract plutonium so “Arak is not an immediate threat.”

The UN’s International Atomic Energy Agency inspectors, led by Director-General Yukiya Amano, will visit Tehran Nov. 11 in their latest bid to win wider access to Iran’s nuclear work. The agency has been trying to obtain updated design information about the Arak reactor. Iran so far has declined to provide the blueprints, saying it isn’t obliged to do so.

The U.S. and its allies suspect Iran is seeking the capability to build nuclear weapons, which the Islamic republic denies. The decade-long conflict has raised the dual specters of another war in the Middle East and a Persian Gulf nuclear arms race if Iran were to acquire a nuclear weapon.

The talks need to persist, U.K. Foreign Secretary William Hague said today on BBC’s Andrew Marr show.

“A great deal went right,” Hague said. The International community has a “good relationship, a working relationship, an amicable relationship” with Iran.

To contact the reporters on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net; Indira A.R. Lakshmanan in Geneva at ilakshmanan@bloomberg.net; Kambiz Foroohar in Geneva at kforoohar@bloomberg.net

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

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