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Iran, IAEA extend monitoring deal to clear sanctions relief hurdle

Highlights

Extension runs to June 24

Iran pumped 2.43 mil b/d in April: S&P Global Platts OPEC survey

Fifth round of JCPOA talks set for this week

Negotiations between Iran and the US on sanctions relief have cleared a major hurdle, with the International Atomic Energy Agency on May 24 announcing a one-month extension of its agreement with Tehran for access to recordings to continue monitoring Iran's nuclear activities through June 24.

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The extension, after the previous monitoring agreement had expired May 21, buys more time for US, Iranian and European diplomats to hammer out a deal on reviving the Joint Comprehensive Plan of Action, which would waive heavy sanctions targeting Iran's energy sector in exchange for nuclear program concessions.

The IAEA's access to nuclear site image recordings has been a major sticking point, with western authorities saying it is critical in order for the JCPOA to be reinstated.

The US dropped out of the JCPOA in 2018 and reimposed sanctions, which have severely constrained Iran's oil production and exports. Iran pumped 2.43 million b/d of crude in April, according to the latest S&P Global Platts survey of OPEC output, down from its pre-sanctions production of between 3.8 million-3.9 million b/d.

US, Iranian and European negotiators last week wrapped up a fourth round of indirect talks in Vienna over the deal, and are scheduled to hold a fifth round this week.

"We have had considerable progresses and we still think that an agreement is not far from reach. What has been left requires contemplation and should be pursued," Foreign Ministry spokesman Saeed Khatibazadeh said of the JCPOA on May 24, according to state-run students news agency ISNA. "If the political decision is made in Washington, results can be easily achieved."

US officials could not be immediately reached for comment, though US Secretary of State Antony Blinken told CNN that Iran has yet to indicate whether it would be willing to take meaningful steps towards a deal.

The US has insisted that Iran bring its uranium enrichment activities back into compliance with the original terms of the JCPOA before any sanctions relief is granted, while Iran has pressed for non-nuclear sanctions targeting its banking and insurance sectors to be lifted.

"I think we've actually made progress in clarifying what each side needs to do to get back into full compliance," Blinken told CNN. "The outstanding question, the question that we don't have an answer to yet, is whether Iran, at the end of the day, is willing to do what is necessary to come back into compliance with the agreement. That's the proposition that we're testing."

Iran's heavy sour grades compete directly with crudes such as Saudi Arabia's Arab Heavy, Arab Light and Arab Medium; Iraq's Basrah Light, Basrah Medium and Basrah Heavy; Russia's Urals; the UAE's Upper Zakum; Oman Crude Blend; Kuwait Export Crude; Venezuela's Mesa 30 and Merey 16; and Mexico's Mata, among others.

Iran also produces and exports ultra-sweet low sulfur oil or condensates, especially from South Pars, which is similar to condensates produced by Norway, Qatar, the US and Australia.