Iran and six world powers sealed a historic accord to curb the Islamic Republic’s nuclear program in return for ending sanctions, capping two years of tough diplomacy with the biggest breakthrough in relations in decades.
Diplomats from the U.S., China, Russia, the U.K., France and Germany reached the deal with their Iranian counterparts in Vienna on Tuesday, their 18th day of talks. President Barack Obama said it blocks “every path to a nuclear weapon” for Iran, while Iranian Foreign Minister Mohammad Javad Zarif called it a “win-win” solution.
Full implementation depends on Iran meeting obligations to curb its nuclear program and address concerns about possible military dimensions of its work. Iran has until Dec. 15 to answer 12-year-old questions about its weapons capabilities. Once inspectors verify compliance, the oil-rich nation will be allowed to ramp up energy exports, re-enter the global financial system and access as much as $150 billion in frozen assets.
“This is probably going to go down in history as one of the biggest diplomatic successes of the century,” Ellie Geranmayeh, a policy fellow at the European Council of Foreign Relations, said by phone from London.
Congress has 60 days to review the document in Washington, where it will meet resistance from lawmakers who oppose making any nuclear compromises with Iran.
Israel, which has threatened military action to prevent Iran from getting a nuclear bomb, said it will use “every means” possible to persuade Congress to reject it, though Obama vowed to veto such a move. The House and Senate would each need a two-thirds majority to override a veto.
Israeli Prime Minister Benjamin Netanyahu denounced the deal as a “historic mistake,” saying in a statement that “sweeping concessions were made in all areas meant to block Iran from the ability to arm itself with nuclear weapons.”
Should the agreement survive review, it would become one of the biggest foreign policy achievements for Obama, who kicked off the initiative with a call to Iranian President Hassan Rouhani almost two years ago. The U.S. cut diplomatic ties with Iran in 1980, after revolutionaries seized the American embassy in Tehran and held hostages for more than a year.
Iran agreed to cut 98 percent of its stockpile of enriched uranium and eliminate two-thirds of its centrifuges, according to a copy of the accord obtained by Bloomberg News,
“This is a sign of hope for the entire world,” European Union foreign policy chief Federica Mogherini said in Vienna. “And we all know this is very much needed in these times.”
Relief, including sales of aircraft by companies including Boeing Co., would be phased in after Dec. 15 if Iran complies. The UN’s International Atomic Energy Agency will negotiate access to all suspect sites, including military bases such as Parchin.
Once UN monitors verify Iran has taken all steps to curb its nuclear activities, the U.S. and the EU will also lift restrictions on most of its financial institutions except those sanctioned for terrorism or human rights abuses. Iranian banks, including the central bank, will be able to process transactions once again through SWIFT, the leading global financial messaging system, U.S. officials said.
The U.S. and the EU will also allow any nation to buy Iranian oil and ease curbs on trading refined products, chemicals and natural gas. Iran holds the the second-largest gas reserves in the world, after Russia.
“If Iran violates the deal, all these sanctions will snap back into place,” Obama said at the White House.
The UN ban on conventional weapons imports and exports by Iran will remain in place for five years, while the UN embargo on ballistic missiles will hold for eight years, according to the draft. The unilateral U.S. arms embargo will stay in place.
Banks including Goldman Sachs Group Inc. and Barclays Plc say it would take six to 12 months for the holder of the world’s fourth-largest crude reserves to revive production by about 500,000 barrels a day. Sanctions cut the country’s crude exports by more than half from a peak of more than 6 million barrels a day in the 1970s.
With new oil flows expected to hit an oversupplied market, Brent, the global benchmark, fell as much as 2.1 percent to $56.63 a barrel and traded at $57.78 at 1:18 p.m. in London. Iran’s benchmark TEDPIX Index, led by oil and gas companies, advanced 0.3 percent at the close, the highest since April.
The accord will also reverberate across the Middle East, where Shiite Iran’s prominence has been growing amid a regional conflict with Sunni Muslim extremists, alarming Gulf rivals led by Saudi Arabia. Iran is a key backer of embattled governments in Iraq and Syria, and supports rebels who control Yemen’s capital, as well as Lebanon’s powerful Hezbollah militia.
In China, Europe and Russia, the agreement will be welcomed by companies eager to access an untapped market of 77 million people. With an economy bigger than Thailand’s and oil reserves rivaling Canada’s, Iran is the most important market still closed to major equity investors, according to investment bank Renaissance Capital.
Ending economic penalties could open Iran’s stock market to investors in early 2016, Renaissance’s Charles Robertson and Daniel Salter wrote in a report on Monday. Inflows could total $1 billion in the first year, they said.
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