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US Congress unlikely to block new Iran deal, oil sanctions relief: analysts

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Platts Global Alert - Oil

US Congress unlikely to block new Iran deal, oil sanctions relief: analysts


Latest Republican bill aims to require congressional review

Platts Analytics expects US sanctions relief by September

Biden not bound by existing congressional review law

  • Autor
  • Meghan Gordon
  • Editora
  • Valarie Jackson
  • Commodity
  • Petróleo

In the latest attempt to block a new Iran nuclear deal and oil sanctions relief, US Republican senators proposed June 11 a bill to require that President Joe Biden submit to Congress any renewed agreement with Tehran as a treaty.

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Analysts do not expect the Republican proposal to get enough votes for passage, but they said it shows the rhetorical opposition the Biden administration faces domestically if the US and Iran both agree to return to the 2015 Joint Comprehensive Plan of Action.

"The last thing Senate Democrats want is to have to chew up valuable floor time this summer on a divisive issue like the Iran deal," Fernando Ferreira, director of Rapidan Energy Group's Geopolitical Risk Service, said in an email.

Senator Jim Risch of Idaho, the top Republican on the Senate Foreign Relations Committee, and Senator Ron Johnson of Wisconsin led 21 other Republicans in introducing the Iran Nuclear Treaty Act.

They said the bill would "strengthen the role Congress plays by ensuring the advice and consent of the Senate is taken into account for a new nuclear agreement, as well as prevent waiving, suspending, reducing, or limiting the application of sanctions on Iran before the Senate has concurred."

Sanctions relief

The US and Iran continued indirect talks in Vienna this week aimed at rejoining the JCPOA, with Tehran returning to nuclear compliance in exchange for relief from US sanctions.

The talks, which started in early April, are taking longer than some analysts predicted. But most still expect a deal to be reached in the coming months.

S&P Global Platts Analytics expects the US to remove sanctions on Iran's oil, petrochemical, shipping, and other sectors by September, allowing the country to boost crude and condensate exports to 1.5 million b/d by December, from 600,000 b/d in May.

Congressional review

A 2015 law aimed at limiting then-President Barack Obama's ability to enter into a deal with Iran is also not expected to be an obstacle to the Biden administration.

The Iran Nuclear Agreement Review Act requires the president to submit any new nuclear deal for congressional review and postpone any sanctions relief until the review is complete, said Rapidan in a June 5 note to clients.

But Rapidan said Biden could sidestep the requirement by arguing it is "simply returning to the old JCPOA, which ... has already been reviewed."

"The courts rarely meddle in foreign policy issues and are unlikely to force Biden to submit the deal," Rapidan said. "While there are hawks in the Democratic party that would like to stop Biden from rejoining the JCPOA, the last thing Senate Democrats want is to have to chew up valuable time this summer reviewing a divisive deal that they know they can't stop. For that reason, we don't expect Biden will submit the deal to Congress."