# Rising oil prices buy Iran time in nuclear talks, officials say Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-05-05 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Iran's Oil Revenue Soars Amid Nuclear Pact Delay Meta Description: Amid soaring oil prices, Iran opts to bide its time, refusing to rush into nuclear deal with world powers to ease sanctions on its economy. URL: https://financedigest.com/rising-oil-prices-buy-iran-time-in-nuclear-talks-officials-sayhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-05-05t064651z1lynxnpei4408krtroptp4iran-nuclear-economy-1736815779160-compressed.jpg) By Parisa Hafezi DUBAI (Reuters) -Emboldened by an oil price surge since Russia invaded Ukraine, Iran’s clerical rulers are in no rush to revive a 2015 nuclear pact with world powers to ease sanctions on its energy-reliant economy, three officials familiar with Tehran’s thinking said. Last year, the Islamic Republic engaged in indirect talks with the United States as a route to cancelling U.S. sanctions that have gutted revenues and dramatically worsened economic hardships for ordinary people, stirring discontent. But the talks have been on hold since March, chiefly over Iran’s insistence on Washington removing the Islamic Revolutionary Guard Corps (IRGC), Tehran’s elite security force, from the U.S. Foreign Terrorist Organization (FTO) list. While the ultimate aim is still to resurrect the deal and so have sanctions lifted, the Iranian officials said soaring [oil prices](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") had opened a window of opportunity for Iran by increasing revenues, giving the economy months of breathing space. Our [nuclear programme is advancing as planned and time is on our side,” said a senior Iranian official](https://www.financedigest.com/australias-nuclear-submarine-plan-to-cost-up-to-245-billion-by-2055-defence-official.html "Australia’s nuclear submarine plan to cost up to 5 billion by 2055 -defence official"), who declined to be named because he was not authorised to discuss sensitive policy issues with the media. If the [talks fail it will not be the end of the world,” said the official, adding that the fact Iran’s economy was not now so reliant on a revival of the deal would provide strong leverage for its negotiators if or when the talks resumed](https://www.financedigest.com/japan-insurers-in-talks-with-reinsurers-to-resume-coverage-in-russian-waters.html "Japan insurers in talks with reinsurers to resume coverage in Russian waters"). Iran’s foreign ministry, which handles the nuclear talks, and the U.S. state department did not immediately respond to requests for comment. [Iran’s finances came under intense pressure](https://www.financedigest.com/two-thirds-of-iaea-board-backs-western-statement-pressuring-iran.html "Two-thirds of IAEA board backs Western statement pressuring Iran") in 2018 when then-U.S. President Donald Trump ditched the nuclear pact between Iran and world powers – approved by his predecessor Barack Obama – and reimposed [sanctions that sharply cut the oil](https://www.financedigest.com/oil-spills-and-near-misses-more-ghost-tankers-ship-sanctioned-fuel.html "Oil spills and near misses: more ghost tankers ship sanctioned fuel") revenues that fund a sprawling Iranian state apparatus. [Oil exports](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") from Iran, which sits on the world’s fourth-largest reserves of crude, plummeted from a peak of 2.8 million barrels per day in 2018 to as low as 200,000 bpd. Tehran retaliated a year later by gradually violating the deal’s nuclear curbs, from rebuilding stockpiles of enriched uranium, refining it to higher fissile purity and installing advanced centrifuges to speed up output – reducing the time it would need to [develop a nuclear](https://www.financedigest.com/edf-edison-ansaldo-team-up-to-develop-nuclear-power-in-europe.html "EDF, Edison, Ansaldo team up to develop nuclear power in Europe") bomb, if it so chose. Tehran says it [seeks only peaceful nuclear](https://www.financedigest.com/france-seeks-strategy-as-nuclear-waste-site-risks-saturation-point.html "France seeks strategy as nuclear waste site risks saturation point") energy. Although Iran does not divulge exact figures on oil sales, an Iranian oil official said they were currently around 1.5 million bpd with most going to [China at a big discount that Iranian authorities have declined to reveal](https://www.financedigest.com/china-most-promising-source-of-funds-for-overseas-developers-reveals-investorist.html "China ‘most promising source of funds’ for overseas developers, reveals Investorist"). Global [oil prices](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") remain high, however, with Brent crude reaching $139 a barrel in March, its highest since 2008 after Russia’s invasion of Ukraine exacerbated supply concerns. The Iranian parliament increased the ceiling of oil and condensates exports from 1.2 [million bpd at a price of $60 last year to 1.4 million bpd based on $70 a barrel in the state](https://www.financedigest.com/wizz-air-loses-fight-against-67-million-in-state-aid-for-romanian-rival.html "Wizz Air loses fight against million in state aid for Romanian rival") budget, Iranian state media reported in March. REVENUE HIKE Tehran’s refusal to back down from the FTO assignation demand has raised [doubt about whether the nuclear](https://www.financedigest.com/e-on-casts-doubt-on-german-plan-to-keep-nuclear-plants-on-standby.html "E.ON casts doubt on German plan to keep nuclear plants on standby") impasse can be resolved. President Joe [Biden’s administration has made it clear that it has no such plans](https://www.financedigest.com/uks-sunak-plans-to-meet-biden-in-g20-summit.html "UK’s Sunak plans to meet Biden in G20 summit"), while also not ruling it out. On Wednesday, U.S. State Department spokesman Ned Price told [reporters that it was unclear whether or not it would be possible to revive the deal](https://www.financedigest.com/australias-macquarie-explores-6-billion-deal-for-britains-mg-sky-news-reports.html "Australia’s Macquarie explores billion deal for Britain’s M&G, Sky News reports") and said Washington was now bracing for either outcome. Iranian authorities have publicly shrugged off U.S. pressure, [saying Tehran has become adept at working](https://www.financedigest.com/boes-bailey-says-bank-reforms-worked-but-questions-about-liquidity-buffers.html "BoE’s Bailey says bank reforms worked but questions about liquidity buffers") around sanctions as they have been a fact of life for decades. Jihad Azour, the International Monetary Fund’s (IMF) Middle [East and Central Asia](https://www.financedigest.com/russian-and-chinese-jets-patrol-east-asia-skies-capping-biden-trip.html "Russian and Chinese jets patrol East Asia skies, capping Biden trip") Department director, said the Iranian economy had adjusted to sanctions over the last few years. And the increase in oil [prices](https://www.financedigest.com/syngenta-4q-profit-falls-as-raw-material-prices-increase.html "Syngenta 4Q profit falls as raw material prices increase") and an increase in (Iran’s) oil production are constituting an additional, I would say, increase in revenues,” Azour told Reuters. However, Henry Rome, Iran analyst at [consultancy group](https://www.financedigest.com/mazars-to-acquire-financial-modelling-consultancy-and-training-provider-corality-financial-group.html "Mazars to acquire financial modelling consultancy and training provider, Corality Financial Group") Eurasia, said the Islamic Republic is underestimating the value of easing sanctions and overestimating its ability to muddle through longer term. Iranian leaders probably consider [stronger domestic economic](https://www.financedigest.com/oil-slumps-on-economic-data-stronger-u-s-dollar.html "Oil slumps on economic data, stronger U.S. dollar") performance, limited U.S. enforcement of oil sanctions and broader Western distraction given the Ukraine war as reasons not to be desperate to [secure a deal,”](https://www.financedigest.com/incentive-fm-secures-new-deal-with-dollar-uk.html "Incentive FM Secures New Deal with Dollar UK") Rome said. Although, they likely remain [open to a deal at the right price.”](https://www.financedigest.com/wall-street-seen-opening-higher-but-u-s-recession-priced-in.html "Wall Street seen opening higher but U.S. recession priced in") [Despite the recent rise](https://www.financedigest.com/suedzucker-quarterly-profits-surge-73-5-despite-cost-rise.html "Suedzucker quarterly profits surge 73.5% despite cost rise") in revenues, sanctions continue to have a major impact on daily life in Iran, meaning that everyone from the business elite to lower-income families face soaring inflation, a sinking currency and rising joblessness. Clerical rulers may therefore be wary of simmering disenchantment at home, according to a [former Iranian government official](https://www.financedigest.com/italy-names-former-treasury-official-to-head-ita-airways.html "Italy names former Treasury official to head ITA Airways"). Ultimately, they prefer an end to sanctions, fearing a [return of unrest among lower-income Iranians whose periodic protests in recent years](https://www.financedigest.com/heathrow-airport-says-return-to-pre-pandemic-demand-years-away.html "Heathrow Airport says return to pre-pandemic demand years away") have reminded leaders how vulnerable they can be to grassroots anger over economic hardship. Not enough people are yet feeling the benefits of [rising oil](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high") revenues, the former government official added. Iranian analyst Saeed Leylaz said Iran’s home-grown economic problems, including mismanagement and corruption that deplete revenue needed for investment, job creation and development, pose a bigger challenge to the establishment than sanctions. The [official inflation rate](https://www.financedigest.com/bank-of-england-officials-split-over-future-path-for-rates.html "Bank of England officials split over future path for rates") is around 40% while some people estimate it at over 50%. Almost half of Iran’s 82 million population are now below the [poverty line](https://www.financedigest.com/poverty-education-levels-draw-battle-lines-in-french-election.html "Poverty, education levels draw battle lines in French election"). Unofficial estimates suggest [unemployment is well above the official rate](https://www.financedigest.com/spains-unemployment-rate-inches-up-to-12-87-in-q4-2022.html "Spain’s unemployment rate inches up to 12.87% in Q4 2022") of 11%. “All the economic indicators point to worsening economic realities in Iran. To say Iran sits on a tinderbox is no exaggeration,” said Alex Vatanka, director of the Iran Program at Middle East Institute. Prices of basic goods like bread, meat and rice are increasing daily. Iranian media frequently report layoffs and [strikes by workers](https://www.financedigest.com/uks-royal-mail-workers-to-strike-in-run-up-to-christmas.html "UK’s Royal Mail workers to strike in run-up to Christmas") who have not been paid for months, including in government-owned factories. Owning a home in Tehran is impossible for many. Prices have risen in recent months by around 50% in some areas. The currency has dropped over 70% against the U.S. [dollar since](https://www.financedigest.com/dollar-heads-for-first-weekly-gain-since-february.html "Dollar heads for first weekly gain since February") 2018. “Where is this oil revenue going? Why we do not feel any improvement?” said teacher Mohsen Sedighi, a father-of-two in Tehran. (Writing by Parisa Hafezi; Additional reporting by Arshad Mohammed in Washington; Editing by Mike Collett-White and Mark Heinrich) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---