Looking for a win-win in Baghdad

By Eric Watkins

LOS ANGELES, May 23 – At today’s talks in Baghdad between Iran and the so-called P5+1 nations – the U.S., Britain, France, China, Russia, and Germany – the best outcome would be a win-win situation for both sides: one where everyone walks away victorious.

A victory for the P5+1 would be an outright agreement by Iran to allow inspectors into its nuclear facilities. A victory for Iran would be an outright agreement by the P5+1 to wind down the sanctions regime now facing Tehran. The question is: will a win-win be possible?

For Iran, ending the sanctions is a must. Already Tehran is facing such reduced sales of its oil that it must store its excess unsold production. Its shore-based storage is full, and its floating storage – very large crude carriers and other tankers – is rapidly filling up.

That may sound like a matter of comparative insignificance. But to anyone who knows the oil industry, Iran’s rapidly diminishing storage space represents the end game of the sanctions program. It means that, absent any place to store its unsold oil, Iran must stop production.


Shutting in production means first and foremost that Iran effectively closes down its one main source of income. Imagine the feeling that would arise on seeing the last wheel being turned to shut down the country’s main source of income for the better part of a century.

Appalling. That is the best word to describe the situation. Appalling. That is what the shutting down of Iran’s oil industry would be. Appalling. It would be tantamount to national suicide. It would be appalling for all of those reasons and more: once shut down, there’s no telling how quickly that industry might be able to restart.

That is the reality now staring Tehran’s leaders right in the face. And that reality has arrived due to the existing sanctions – not the ones scheduled to take effect on July 1 when the European Union’s go into full effect for the first time.

Nor have Tehran’s leaders contemplated the effect on their oil and gas industry of a completely new round of sanctions proposed this week by the United States Senate that would extend current measures to include any energy-related joint venture anywhere in the world in which Iranian entities are involved.


“It is the sense of Congress that the goal of compelling Iran to abandon efforts to acquire a nuclear weapons capability and other threatening activities can be effectively achieved through a comprehensive policy that includes economic sanctions, diplomacy, and military planning, capabilities and options,” the Senate measure said.

Senators emphasized solidarity with the White House by stating that their objective is “consistent with the one stated by President Barack Obama in the 2012 State of the Union Address: ‘Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal’.”

The Senate measure does not authorize the use of military force against either Iran or its ally Syria, which is under a separate set of sanctions for its repression of anti-government protests.

In a word, the measure leaves Iran to understand that the United States Senators believe in the strength of his sanctions plan and do not need to threaten war to achieve their aims.


Senate Banking Committee Chairman Tim Johnson, Democrat-South Dakota, made that view clear in a statement after the vote.

“With these new sanctions, as negotiations on Iran’s nuclear program are renewed this week in Baghdad, we are reminding Iran’s military and political leaders that they must make a clear choice,” said Johnson.

“They can come clean on their nuclear program, and end the suppression of their people and stop supporting terrorist activities around the globe. Or they can continue to face sustained multilateral economic and diplomatic pressure, and deepen their international isolation,” he added.

The U.S. and its allies are clearly resolved to disallow Tehran the option of nuclear weapons – weapons that Tehran has long insisted form no part of its nuclear program. It has always claimed to be interested only in atoms for peace.


Tehran can make good on that insistence in Baghdad.

Tehran can walk away from the table a winner today. It need only agree to a full and complete inspection of its nuclear facilities, an inspection that would enable a victory for all parties.

The U.S. and its allies would see an end to their concerns over nuclear weapons in the wrong hands, while Tehran could openly have the nuclear facilities it has always said it wants.

That sounds like a win-win.

© Glamma Productions Inc. 2012

About Eric Watkins

Eric Watkins is a consultant specializing in oil diplomacy. A former journalist, Mr. Watkins's work has appeared in numerous leading publications including The Wall Street Journal, The Economist, The Financial Times, and specialist media such as Oil & Gas Journal, Middle East Economic Survey (MEES), and Lloyd's List.
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2 Responses to Looking for a win-win in Baghdad

  1. Mike Smith says:

    Iran is “negotiating” with the Obama’s team from the hope a dope playbook ala the Vietnam Paris peace talks. The purpose is to buy time so that they, Iran, can complete their critical nuclear weapons component development plan knowing that over time the West will loss it’s resolve and they, Iran, can simply build the weapons like North Korea did and then say Up Yours. Any ink lauding the “peace talks” “fresh talks” is aiding Iran and it’s regime.

    • Eric Watkins says:

      The negotiators do seem aware of this, and are not prepared to lift the sanctions at all at the moment. Nor should they. Iran is feeling the pinch of sanctions, and the pinch will get worse before it gets better.

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