Iran Oil Waiver Offers Tehran Crucial Lifeline as Talks Proceed
(Bloomberg) — The US issued a 60-day license allowing Iran to sell oil on the international market, giving Tehran an economic lifeline as the two adversaries continued talks for a permanent peace deal.
Vice President JD Vance, attending the discussions in Switzerland, described the first round of negotiations as “very very good” and said Iran had agreed to allow nuclear inspectors back into the country — a claim later backed up by President Donald Trump. But Iranian officials, who also cited progress, challenged that claim, saying Vance’s assertion was “false and does not reflect reality.”
The discrepancy underscored the challenges that remain ahead as the two sides look to fulfill a memorandum of understanding signed last week to halt their conflict and pave the way for a long-term deal. That agreement left key issues unresolved while also aiming to give Iran immediate financial benefit, a dynamic that drew fierce criticism from Trump’s Republican allies.
Hanging over the delicate discussions is the status of the Strait of Hormuz and the continued fighting in Lebanon, where Israel is waging a campaign against Iran-backed Hezbollah militants.
Iran hailed the waiver to allow energy sales after years of punitive sanctions and the promise of a reconstruction and development fund. Still, Tehran signaled it wouldn’t relent on using leverage over Hormuz if Israel continues fighting in Lebanon.
Markets have been eager for any signs the US and Iran are making progress in talks. Global benchmark Brent traded near $77 a barrel Monday as a potential flood of Iranian oil fueled expectations for a near-term glut of energy supplies. Iran has ramped up oil exports in recent days thanks to the US lifting a naval blockade that was squeezing the Islamic Republic’s economy.
The administration has pushed back over criticism of the interim deal, insisting it would bring relief to Americans in the form of lower energy prices and that the US will have safeguards to ensure Iran does not develop nuclear weapons, a key aim of the Trump administration.
“Everybody is fully aware that Iran will agree to have Major Weapons Inspections in order to ensure ‘Nuclear Honesty’ long into the future,” Trump said Monday on social media.
The claims of a breakthrough on nuclear inspections face skepticism. Iran said earlier no nuclear issues were discussed and that Tehran would engage with the IAEA under existing procedures, state-run IRIB reported, citing a foreign ministry spokesman.
Vance also said Tehran would buy American soy, wheat and corn with unfrozen funds as part of the deal. There was no indication from the Iranian side that they were ready to make those purchases, and memorandum of understanding Iran signed with the US last week states that the Iranian central bank will be able to designate the beneficiaries of unfrozen funds.
The fraught nature of the talks was evident, with the discussions almost derailed over the weekend after Trump made fresh threats and the Iranian delegation said they were prepared to walk. Discussions are set to continue this week at the Swiss resort of Bürgenstock. Vance was joined by Jared Kushner, Trump’s son-in-law, and Steve Witkoff, a special envoy. Lower-level delegates are set to remain to discuss technical matters, with Vance and Iran parliament speaker Mohammad Bagher Ghalibaf leaving.
Vance said the negotiations with the Iranians focused, in part, on building a “mechanism for keeping the Strait of Hormuz open.” He did not answer directly when asked by a reporter if the US wanted Israel to withdraw troops from southern Lebanon.
On Monday, Iranian Foreign Minister Abbas Araghchi said mediators had managed to ease some of the tensions over Lebanon. He added Iran was beginning to see financial benefits from last week’s agreement. The US Treasury’s sanctions waivers for some Iranian oil and petroleum products were a condition of the MOU.
Mediators Pakistan and Qatar said Iran and the US agreed to establish a “high level committee” to oversee the talks and working groups dealing with nuclear issues and sanctions. There will also be a “de-confliction cell” to help ensure military operations in Lebanon end. Iran and the US also established a communication line to “avoid incidents” related to maritime traffic through Hormuz.
Trump has been under significant pressure to end the war as a surge in energy prices has accelerated inflation globally and dented his Republican Party’s popularity ahead of November elections. Israel and Iran hawks, though, say the MOU gives far too much financial relief without curbing Tehran’s ballistic missile program or support for militant groups in the region.
Israel is not party to the Swiss talks and has balked at the idea of its forces leaving southern Lebanon until Hezbollah no longer threatens its northern communities.
–With assistance from Carla Canivete and Paul Wallace.
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