The first operational implementation of the Agreement between P5 + 1 and Iran, namely the Joint Comprehensive Plan of Action, signed on July 15, 2015, dates back to January 16, 2016.
The data from the latest quarterly IAEA written report on Iran’s nuclear facilities provides information about some interesting new topics: the construction of the heavy-water Arak reactor, for example, has been stopped by the Iranian government.
Moreover, the Shi’ite Republic has decided voluntarily not to continue the testing of the equipment needed to operate with the IR-40 centrifuges which had initially been designed for the Arak reactor.
Furthermore, the technological materials and the nuclear fuel that had to be used for the Arak reactor were kept in safe and sure places under the ongoing monitoring of the Vienna-based International Atomic Energy Agency.
Moreover, Iran has always and continuously informed the Agency of the presence and production of heavy water at the Heavy Water Production Plant in Khondab, near Arak, which is expected to produce approximately 16 tons of heavy water per year.
These are IAEA data and information, which are also confirmed by official sources and not by the Iranian Republic.
On February 11, 2018, the IAEA checked whether the Khondab plant was active and the total heavy water held by Iran amounted to 117.9 tons.
Furthermore, again according to the IAEA, the Shi’ite Republic carried out no suspicious activity at the Research Reactor near Tehran nor in the facility for processing radioisotopes of Iodine, Molybdenum and Xenon, also located north of the capital city – a facility which is the main one for Iran’s current nuclear production.
Again according to the Vienna-based Agency, Iran has not carried out any activity beyond the limits imposed by the JCPOA in any of the other nuclear facilities that have been inspected by the IAEA.
Moreover, considering IAEA’s accuracy, it would be very difficult for Iran to keep other nuclear facilities fully secret, undetectable and untraceable by IAEA experts.
In Natanz, however, there are still 5,060 IR-1 centrifuges arranged and installed in thirty “cascades”.
The IR-1 centrifuges extract 3.5% of the natural uranium used there, but always low-enriched one.
They are based on the old Pakistani technology of the P1 ones, relying on an old Dutch design.
Some old or broken centrifuges have been replaced; others have extracted isotopes to date, for a total of 300 kilos of low-enriched uranium (LEU).
Furthermore, six “cascades” of centrifuges totalling 1,044 units are still active at Fordow, but all the equipment of the Iranian nuclear systems have been checked regularly and repeatedly with the best technologies currently available to the Vienna-based Agency.
Therefore, as stated in the latest report on Iran available to the IAEA, the Shi’ite Republic has systematically adapted to the JCPOA demands, although having now refused Imam Khomeini’s policy line whereby nuclear power was the “product of the devil”.
Hence what sanctions does President Trump want to impose on the Shi’ite Republic of Iran?
First and foremost, sanctions on the Iranian government’s and Iranian citizens’ purchase and use of US dollars. Secondly, sanctions on Iran’s trade in gold and other precious minerals, as well as on the direct or indirect purchase or transfer to Iran of graphite and other processed or non-processed minerals, such as aluminium, steel and coal (which, however, is obviously not a metal). Finally sanctions on the transfer of software for whatever kind of companies in Iran.
Furthermore a new type of sanctions will be imposed on relevant” commercial transactions (but nobody can precisely measure this relevance) and on the purchase of Iranian currency or on the holding of rial-denominated funds or deposits outside the Shi’ite Republic. Sanctions are also envisaged on the purchase or sale of Iranian government debt securities and other restrictive rules are imposed even on the Iranian automotive sector.
An automotive sector which last year manufactured 1.5 million cars.
Further sanctions are also envisaged on Iranian-made carpets, on traditional food (pistachios, in particular), as well as on Iran’s port traffics abroad and finally on all oil transactions.
And here we come to the core of Iran’s nuclear issue, i.e. the sanctions on financial transactions involving the Central Bank of Iran, as well on commercial information concerning Iranian banks and clients, on any kind of insurance and reinsurance and, finally, on the energy sector – Iran’s real the economic heart.
While the Iranian oil purchases have been reduced “significantly” by non-Iranian third parties – very dangerous vagueness and indefiniteness for Europe – the US Treasury could decide not to impose sanctions on third parties trading with Iran.
In other words, a clear blackmail to the EU.
The sanctions on Iran-exported oil were put in place, for the first time, in 2012.
The underlying reason for them was the notorious “terrorism” perpetrated with a huge amount of means and militants from all Arab countries and Turkey, the second NATO armed force.
However, let us revert to the oil economy.
Sanctions are objectively imposed on 20% of the oil and gas produced by Iran – and the situation has not much changed with the new Trump’s Presidency compared to Obama’s.
In other words, a quantity ranging from 500,000 to a million barrels a day.
In financial terms, a loss of over 1.5 billion dollars every month at the current oil barrel price.
Before the new sanctions – foreseeing the climate imposed by the current US Republican President – Iran had already pushed its crude oil production up to 2.7 million barrels a day.
Meanwhile, the issues relating to the new sanctions on the Iranian Shi’ite Republic will never be fully “operational” as they were in 2012, only because there is complete disagreement between the EU and the USA. The time needed to impose said sanctions will predictably be longer than usual.
In the meantime, crude oil demand is growing, considering OPEC’s and Russia’s restrictions on new extractions, as well as the crisis in Venezuela.
The companies that will certainly be hit by the US sanctions are very important for the big business activities that were already shaping in 2017.
They include Boeing and Airbus – the latter has already delivered its aircrafts to Iran, but always a few compared to the 100 already programmed by Air Iran and Aseman Lines.
A contract worth 19 billion US dollars for the Iranian national airline and additional 17 for Aseman Lines.
General Electric, too, has obtained significant orders from its Iranian customers for oil infrastructures and for oil and gas fixed transport lines.
As easily expected considering President Macron’s recent explicit reactions, another company negatively affected in the vast global business community is the French Total.
The French oil multinational has a contract with the Chinese company CNPC, which is worth 2 billion US dollars, to develop the offshore oil and natural gas field of South Pars.
Total has already spent 90 million dollars to comply with the terms of the contract, while the Iranian state-owned company will obviously not reward foreign participants until production begins.
Other companies damaged are also Volkswagen and the French car group PSA.
As early as last year the Germans had again started to sell cars to the Iranians, but they will soon have to change their strategy in that very promising market.
However, the price of petrol and other fuels for transport or heating purposes will increase steadily all over the world.
Therefore, the game of restrictions and sanctions on Iran is now in the hands of Saudi Arabia, one of the real winners of the round of sanctions the USA has just imposed on Iran.
The Saudi oil Minister has already said that “he is committed to maintaining the oil market stability”.
Minister Khalid al Falih has added that the Kingdom will work with all those that, outside or inside OPEC – the clarification is subtle and very important – intend to mitigate any damage resulting from future limitations of oil availability.
Last April Iran produced approximately 3.8 million oil barrels a day, but no one can predict when and how oil extraction in that country shall really decrease.
Hence we are noting an artificial shift of energy markets from Iran to the pro-Saudi universe, which certainly also favours the US shale oil and gas producers that need quite high oil barrel prices to create margins and reinvest their capital, at least in the short term.
It also likely, however, that many Iranian oil and gas consumers will have little to do with this US round of sanctions.
China, for example, which is currently Iran’s largest oil customer.
But also European companies and some Asian countries could be damaged by US sanctions.
Damage that, however, would be limited, based on the indications provided by US documents.
In fact, they would affect fewer than 200,000 barrels per day up to reaching 500,000 barrels per day after six months since the implementation of President Trump’s sanctions.
Moreover, as already seen, other producers could quickly fill the Iranian void, such as Saudi Arabia, Iraq or even Russia, while in 2019 – thanks to its shale oil and gas – the United States will reach a level of extraction equal to as many as 11.9 million barrels a day.
The US shale oil and gas standard applies only if the price per barrel is sufficiently high.
Almost paradoxically, only the predicted increase in US shale oil and gas would be probably enough to fill the void and gaps left by the sanctions against Iran.
Certainly Europe can do many things to definitively avoid becoming irrelevant at strategic and geo-economic levels.
Things it does not do because it is still slave to a World War II mentality that neither the US Democrats nor the Republicans currently have.
Moreover, its trade with Iran almost doubled in 2017 alone.
For example, Europe could give reliable and unambiguous signs to Trump’s Presidency by repeating – as sometimes happened – the blocking regulations within the EU market to prevent any European individual or company from being obliged to accept the US secondary sanctions, which must never depend on non-EU courts for their legal resolution and settlement.
Europe could also improve the financial conditions of European companies that operate also in relation to Iran, by protecting the lines of credit to the Shi’ite Republic, with liquidity always denominated in euros and not in US dollars.
Moreover, it would be very useful to centralize the operations for protecting the European business in Iran within the E3, i.e. the group of EU countries belonging to the P5 + 1 which already negotiated the nuclear deal with Iran in July 2015.
The geopolitical issue mainly lies in the Iranian missiles, which may or not be armed with nuclear warheads.
This has been the strategic theme of President Trump and also of the most recent positions of the Israeli Prime Minister.
According to the statements made by Gen. Ali Jafari, the Commander of the Iranian Revolutionary Guards, currently Iran’s military and scientific research focuses only on the missiles having a maximum range of 2,000 kilometres.
Said missiles, however, can hit Saudi Arabia, Israel and most of the US bases in the Middle East.
It is obvious, however, that they are missiles for conventional deterrence.
Moreover, also Saudi Arabia has a vast missile arsenal.
The Saudi Strategic Forces operate from five different bases, but above all from Al Watah, 200 kilometers south of the Saudi capital city.
There is also the Saudi base of Asir, recently hit by some Yemeni missiles, probably Iranian-made, launched at the beginning of last April.
Saudi carrier networks are often maintained by Chinese technicians and, considering the large Saudi participation in the Pakistani nuclear project, it is very likely that the Sunni Kingdom could now acquire nuclear warheads fairly easily.
Saudi missiles, too, should have a maximum range of 2,650 kilometres.
Furthermore, Iran does not yet have an air weapon capable of fully exploiting these missile networks and, in any case, the Saudi/Iranian ratio of military forces is still 5 to 1.
On January 29, 2017, Iran launched a medium-range ballistic missile and in March 2017 two other short-range ones. On June 18, 2017 there was the operational launch of eight missiles targeted to the Daesh-Isis bases in Syria, in response to a terrorist attack suffered by Iran.
On September 23, Iran fired a new missile followed by a carrier for launching Simorgh-type satellites, which, however, is not designed to return back to the atmosphere.
From 2006 to 2012, however, Iran set up and arranged five missile tests, all reported and already sanctioned by the USA.
Currently Iranian missiles are supposed to total approximately one thousand, all medium and short-range ones, with Russian or North Korean design and especially Chinese technical assistance.
The UN Security Council Resolution No. 2231, which accepted the JCPOA, also states that “Iran shall not test any ballistic missile”, while there are no UN official bans on the subject.
There are currently ten types of Iranian carriers, while spacecraft and satellites are launched by two types of two-stage carriers, namely Safir, and the aforementioned Simorgh, both using liquid fuel.
There are currently three types of Iranian cruise missiles: firstly, the KH-55 which can carry (even) fissile material up to 3000 kilometres – a missile obtained illegally from Ukraine in 2001.
Secondly the Khalid Farzh, which has a range of 3,000 kilometres and can carry a payload of almost 1,000 kilos. Thirdly the Nasr-1, a missile for anti-ship and anti-tank uses, capable of destroying targets up to 3,000 tons of weight – as Iranian sources maintain.
Between 2000 and 2002 Iran also exported many conventional missile carrier and many spare parts to Libya.
Nevertheless, since 2007 the UN Security Council has already forbidden Iran from selling or transferring conventional weapons. It has also prohibited third countries from acquiring any type of Iranian military supplies, unless this is permitted by a specific UN Security Council’s declaration.
From 2012 to 2015, however, Iran sent weapons to the Taliban in Afghanistan, to Assad’s regime in Syria and, most likely, also to other countries in the Middle East.
In all likelihood, although having signed the Chemical Weapons Convention, Iran keeps on producing chemical and bacteriological warfare agents.
Also the other primary geopolitical players in the Gulf and in Greater Middle East are doing so.
Nowhere as on the Middle East military theatre the Gospel criterion of casting the first stone applies.
Hence it is good to never believe that the problem of N and BC proliferation holds true only for Iran, because there are also Saudi Arabia and Egypt, which has dealt with weapons for Iran and above all North Korea – not to mention the new nuclear treaty signed on December 11, 2017 between Egypt and the Russian Federation for the construction of a nuclear reactor in El-Dabaa, 140 kilometres west of Alexandria.
Not to mention, finally, the Jordanian nuclear reactor inaugurated in December 2016, which was built in collaboration with the University of Seoul.
A few days ago, Saudi Arabia made it clear that if Iran manufactures its nuclear bomb – as the Westerners say – it will quickly turn to its military nuclear plan.
All these topics shall be discussed at the forthcoming UN High Level Conference on Nuclear Disarmament scheduled before the end of this year.
Therefore, the issue lies in developing a real nuclear-weapon-free zone throughout the Middle East, with specific characteristics and internal structures operating within the IAEA – and this is also an old Iranian proposal, clearly targeted to Israel.
Nobody, however, has a real interest in a nuclear zero-sum game in the oil area.
It is a serious mistake. A Russian, Chinese, Israeli and EU alliance could really change things in the nuclear system of the entire Middle East.
Nevertheless, we could also think of an agreement within the United Nations that can mutually guarantee – at the lowest possible conventional level – all the countries in the region.
GIANCARLO ELIA VALORI
Honorable de l’Académie des Sciences de l’Institut de France