What Matters Most in the Iranian Nuclear Deal
By: Scott Stewart | Stratfor.comJuly 15, 2015

Seven years, six months, 23 days, three Iranian presidents and two American presidents later, Iran has reached a deal with the six world powers — the United Kingdom, China, France, Russia, the United States and Germany — to contain its nuclear program. Overcoming three and a half decades of diplomatic hostility takes time, and this deal was certainly no exception.

But before speculation runs wild on how many barrels of oil will now be dumped on the markets, how much cash and weapons Iran can funnel to its militant allies, and all the ways Iran could end up acquiring a nuclear weapon anyway, allow us to lay out what actually matters and is likely to develop in the years ahead as a result of this deal.

First, let's get the timeline straight. There is a very strategic line in the introduction of the deal that states that the agreement "will produce the comprehensive lifting of all UNSC (U.N. Security Council) sanctions as well as multilateral and national sanctions related to Iran's nuclear program." The lifting of all sanctions all at once was an oft-repeated and totally unrealistic demand from Iranian officials. Though the Iranian government can use the above line to sell the deal at home and show it delivered on its sanctions promise, the timetable is far more nuanced.

The U.S. Congress will have 60 days to review the deal. If the legislature rejects it, the president will veto the congressional decision, and there probably will not be enough votes in Congress to override the veto. Meanwhile, in the coming days, the United Nations will pass a resolution endorsing the agreement. Ninety days from that point, the agreement can be formally adopted. Before the deal is formally implemented, the International Atomic Energy Agency (IAEA) will submit a report due by Dec. 15 that verifies Iran has come clean on outstanding issues related to its nuclear program. The IAEA will also have to verify that Iran has implemented the nuclear-related measures of the agreement.

From that point, Iran will enter the eight-year implementation period during which the IAEA will closely monitor its limited nuclear activity for civilian purposes and any suspected nuclear sites. When the deal is officially implemented, the United Nations will pass a resolution terminating nuclear-related sanctions on Iran, and the European Union will terminate its nuclear-related sanctions on Iran. (The arms embargo will remain in place for five years.) Unable to get Congress to budge on lifting sanctions anytime soon, the U.S. president will terminate executive orders related to Iran's nuclear program and will stop enforcing sanctions codified in U.S. law. Only when the IAEA concludes that Iran's nuclear program remains peaceful — which could come after eight years of testing Iran's compliance — will the U.S. administration seek legislation to formally terminate sanctions. Even then, it will be up to Congress to comply.

What this means is implementation of the deal could be delayed until early 2016, and only then will the world see a tangible impact from the roughly 40 million to 50 million barrels of oil Iran has in storage and the roughly 300,000 barrels per day in additional exports Iran could add to current stockpiles within a few months of implementation.

When it comes to the long overdue project of reviving Iran's decrepit energy industry, the United States will remain largely shackled by sanctions. That field will be left open primarily to European and Asian investors, who will have the political leeway to make sizable investments in the Iranian energy sector. And any investors who do try to enter the Iranian market will still have to contend with an energy and construction sector that is dominated by the Islamic Revolutionary Guard Corps, which will be quite resistant to external competition, preferring the days of a closed economy when it was up to the corps to evade sanctions and keep Iran's economy afloat.

The implications of the deal go far beyond dollar signs and crude barrels. Indeed, the end of the arduous negotiation period is just the beginning of a very volatile period for the Middle East. Sunni powers in the region, with Saudi Arabia and Turkey in the lead, will be much more active in counterbalancing Iranian power while competing among themselves. Israel will fortify and diversify its relations in the region to the best of its ability in search of allies with a common interest in containing Iran's militant proxies.

For the United States, the Iranian nuclear deal is a step toward a much more agile foreign policy for the Middle East — one in which it leans on native powers to manage regional burdens rather than being at the center of every conflict that arises. The United States already relies on Iranian Shiite militia groups in Iraq to sustain the fight against the Islamic State. And in Syria, the United States and Iran inevitably will have a discussion over a power-sharing agreement in Damascus when the time is right. But the U.S.-Iranian relationship is by no means exclusive, nor will it automatically make the Middle East easy for Washington to deal with. The United States will have to strike a balance with the Sunni powers in the region as it works on developing its relationship with Iran, and it will take a lot of time, energy and strategy to manage an array of competing interests without getting sucked into the next big conflagration.



This article originally appeared on Stratfor.com

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