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Feature: Why Trump kicking Iran deal to Congress could preserve status quo


Congress appears resistant to kill nuclear deal

Analysts see amendment, new bill or stall as paths forward

Action may be little more than a political statement

Washington — President Donald Trump has left the fate of the Iran nuclear deal -- and the more than 1 million b/d of oil that it returned to the market -- up to the US Congress.

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But with a crowded legislative calendar and growing bipartisan support to keep the nuclear deal in place, it looks increasingly likely that Congress may do nothing on Iran in the coming months, several analysts told S&P Global Platts. Or lawmakers may pass a bill with almost no significance to the deal and scant market impact, they said.

"You can get a bipartisan agreement around conditions that are consistent with the [Joint Comprehensive Plan of Action], or at least do not explicitly violate it," said Suzanne Maloney, deputy director of foreign policy with the Brookings Institution.

"The concept of some kind of middle ground that is amenable to many on both sides of the aisle who are not eager to see the deal scuttled but would like to put pressure on Iran for other issues -- that seems like a reasonable outcome to the president's desire to decertify without blowing up the deal," she said.

Trump announced October 13 that he would not certify Iranian compliance with the deal, known as the JCPOA, as required by Congress every 90 days.

Instead of outright killing the deal, Trump handed it off to Congress "to address the deal's many serious flaws so that the Iranian regime can never threaten the world with nuclear weapons," he said in a speech. "These include the deal's sunset clauses that, in just a few years, will eliminate key restrictions on Iran's nuclear program."

A freeze on Western sanctions since the nuclear deal took effect in January 2015 has allowed more than 1 million b/d of Iranian crude to return to the global market. The country is currently exporting about 2.2 million b/d.

Iranian production has climbed to 3.83 million b/d as of September, compared with 2.91 million b/d in January 2016 when sanctions were lifted, according to S&P Global Platts survey data.

Trump did not lay out a timeline for congressional action or offer details on how he wanted Congress to alter the "serious flaws" in the deal.

Related Capitol Crude podcast episode: If US reimposes sanctions, Iran's major oil consumers could sway success


The vague directive from the White House has fueled confusion on Capitol Hill and largely drawn criticism from Democrats who argue that there is little lawmakers can do to influence a multilateral nuclear arms agreement.

"The president's plan doesn't make sense," said New York Representative Eliot Engel, the top Democrat on the House Foreign Affairs Committee. "Negotiating additional terms to the nuclear deal requires a coalition of international partners, not unilateral congressional action."

In addition, lawmakers, including many Republicans, are wary of taking any action that could imperil the JCPOA, limiting the chances of substantial action in Congress.

"As flawed as the deal is, I believe we must now enforce the hell out of it," said House Foreign Affairs Committee Chairman Ed Royce, Republican-California.

So where is Congress headed on Iran?

Analysts see three possible paths: reinstating the frozen sanctions through a fast-track procedure allowed for in the 2015 Iran Nuclear Agreement Review Act, or INARA; passing separate legislation that could set up new sanctions against Iran outside the JCPOA; or using a deliberate stall effort.

Each of those options has expected hurdles and each raises new questions about the future of the Iran deal.

"There's grave uncertainty about how that moves forward," said Maloney with Brookings.

Related: Find more content about Trump's administration in our news and analysis feature.


INARA, the 2015 oversight law, which requires the president to certify Iranian compliance with the deal every 90 days, allows Congress to reinstate sanctions against Iran that were suspended in exchange for Tehran limiting its nuclear program.

Under this path, the Senate could pass an amendment to INARA with a simple 51-vote majority, rather than the 60 votes needed to overcome a likely filibuster. US sanctions would snap back into place.

But reinstating the sanctions without clear evidence of Tehran's violations would be tantamount to the US walking away from the JCPOA, Secretary of State Rex Tillerson told reporters last week. Because that would give Tehran license to abandon the deal too, many US lawmakers are unwilling to kill the deal to prevent Iran from becoming a nuclear power.

The 60-day window for congressional action under INARA coincides with a crowded legislative calendar as Congress attempts to grapple with tax reform, health care and spending bills.

"I think it's a very fine line they have to walk and if they do any language at all that gets into the deal itself, it's very problematic," said John Hughes, a vice president at Albright Stonebridge Group and formerly the State Department's deputy director in the Office of Sanctions Policy and Implementation.

Separately, Congress could take up new legislation, such as a bill outlined Friday by Senate Foreign Relations Committee Chairman Bob Corker, Republican-Tennessee, and Senator Tom Cotton, Republican-Arkansas. The full text has yet to be released, but the senators said in a blueprint that the measure would lead to the automatic reimposition of sanctions if Iran comes within a year of obtaining a nuclear weapon.

Kevin Book, a managing director with ClearView Energy Partners, said Congress might also remove the requirement in INARA for Trump to certify Iranian compliance every 90 days, a deadline that forces the president to symbolically break a campaign promise to end the nuclear deal every three months.

It is unclear how receptive Democrats would be to potential changes to the JCPOA, one of the signature accomplishments of the Obama administration. Unlike the expedited process under INARA, the new legislation would require 60 votes in the Senate, or support from at least eight Democrats.

The third option would be for Congress to stall, either forcing Trump's hand on Iran or forcing the administration to continue to grudgingly keep sanctions suspended. This will likely force the issue to January 12, the latest deadline for Trump to waive sanctions to keep the US compliant with the JCPOA. That happens every 120 days.

"There's got to be an agreed path forward between the White House and the Congress by the end of the year, otherwise I think we're in a bureaucratic nightmare," Maloney said.


Joe McMonigle, an oil analyst for Hedgeye and a former Energy Department chief of staff under President George W. Bush, said Trump likely will not have patience for congressional inaction as it pushes for changes to the Iran deal.

"Trump wants to use threat of sanctions for maximum leverage to get Iran to the negotiating table," McMonigle said. "Delaying legislation provides no leverage for that strategy."

Book with ClearView said it is possible that Congress fails to pass "strict" legislation causing sanctions to snap back into place. He said it is more likely that Congress will pass legislation allowing for conditional sanctions action where sanctions would only snap back if Iran violated provisions within the nuclear deal.

"Looser legislation has a very good chance, in our view," Book said.

But any congressional action on sanctions may ultimately boil down to political maneuver, according to Hughes, the former State official.

Imposing sanctions on "malign activities" such as Iran's ballistic missile program or human rights abuses would likely be redundant, Hughes said.

"There's not a single thing that Iran is doing that people have a problem with that you could not sanction today," Hughes said. "This is mostly a political statement."

--Brian Scheid,

--Meghan Gordon,

--Edited by Jason Lindquist,