Ukraine Crisis Not Limited To Region; Iran Nuclear Issue At Stake

UkraineBy United Nations Cartographic Section; Alex Khristov. [Public domain], via Wikimedia Commons

RBC Capital Markets analysts Robert Stallard and Steven Cahall, in their latest edition of “Generally Speaking,” point out that the Ukraine crisis could have some long-ranging effects beyond the region itself.

In this edition of Generally Speaking our geopolitical adviser, General Charles Vyvyan, examines Iran’s nuclear programme and the possible impact on those negotiations from the situation in Ukraine.

Introduction

“The crisis which has developed in Ukraine is not just a regional issue; it has an even more significant and long term global dimension. Clearly it is seriously impacting on those involved on the ground, principally the inhabitants of Ukraine and Crimea; but it is having an arguably greater impact in the international community, where the perceptions of relative advantage in diplomatic activity are changing on a regular basis – and nowhere more so than in the current negotiations over Iran’s nuclear programme. So far Iran has been sitting out the crisis, and will for the moment continue to do so; but it can see that any fracture in the unity of the P5+1, if it becomes permanent, may well offer it substantial benefits in its approach to the negotiations.”

Interim Agreement

“So far the provisions of the Nov 13 Agreement are being honestly and effectively implemented: the International Atomic Energy Agency (IAEA) reports that Iran has taken the agreed steps in its nuclear decommissioning; it has begun to reduce the number of centrifuges in use; it has begun to dispose of its stock of 20% Highly Enriched Uranium (HEU); it has halted any further construction at the Arak Heavy Water reactor; and it is allowing the agreed levels of access to its facilities. The US/P5+1 have for their part relaxed the very limited trade sanctions which were part of the deal, and unblocked the agreed level of frozen funds. They remain satisfied that there has been no erosion of the overall sanctions regime, and that there has not been any significant level of cheating; they are aware that the level of Iran’s oil exports, at around 1.3m bpd, are rather more than anticipated, but accept that they are within the overall agreed level.”

Iran see opportunities from disputes over Ukraine

Iran can see already the opportunities which could arise if the unity among the Permanent Members of the UN Security Council becomes fractured following the disputes over Ukraine. First the P5+1 would find it very hard to introduce any further sanctions to put additional pressure on Iran; and this could well be the case as calls in the US for an intensification of the sanctions regime will become harder to resist as the mid-term elections draw nearer. Second, Russia could begin to champion Iran in its confrontation with the West, as it is already doing in Syria; it could, for instance, renew its agreement to the sale of the A-300 Air Defence system, and it could institute a system whereby it could get Iranian oil onto the international market – sanctions be damned!”

Summary

“The Interim Agreement is being effectively implemented with no material problems. The negotiations for the completion of the Final Agreement are continuing, but are unlikely to reach a conclusion by January 2015. The probable sequence of events is a renewal of the Interim Agreement in July this year, followed in January next year by the signing of a ‘new’, but incomplete Agreement. Compromise is possible, but the negotiations will be, largely for political reasons, difficult. The developments in Ukraine, and their fall-out are likely to prove of more advantage to Iran than to the P5+1; and will make the achievement of any Final Agreement that much more difficult.”

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