Iran is winning - and they know it
The US and the five permanent members of the United Nations Security Council and Germany (the so-called P5+1) are set to work past a July 9 deadline during negotiations in Vienna, after working through an original deadline of June 30th. And though an anonymous source "close to the talks" has suggested that the P5+1 has only 48 hours to finalize a deal, it's unlikely that an agreement isn't closed in the near-term.
The talks have just benefitted Iran far too much up to this point. And the past few days have provided crucial evidence that Iran's negotiators understand just how dominant of a position they're in.
Arms embargo now part of talks...
On Monday, Iran reportedly demanded that the United Nations lift its arms embargo on the country during the talks. This was a canny move on Tehran's part: Russia, a member of the P5+1, is currently under US and EU sanctions over its annexation of Crimea and subsequent invasion of eastern Ukraine.
Russia's also the world's second-largest arms exporter. An end to the embargo directly benefits a P5+1 state eager for a newly enriched and highly militarized weapons buyer, which is why Russia is keen on lifting the embargo as well. Russia Foreign Minister Sergei Lavrov now says that the embargo is the "only ... big problem" remaining in the talks.
More importantly, Iran has seen the P5+1's negotiating position erode on a number of core issues, including the the right to enrich uranium, the operation of the once-secret and heavily fortified Fordow enrichment facility, and Iranian disclosure of its past nuclear-weaponization activities. Even during the joint-plan-of-action agreement, Iran was allowed to flout the agreement's oil-export caps without punishment. And in April, President Barack Obama admitted that Iran would have the option of constructing a nuclear weapon on a very short timescale after the deal's most onerous uranium-enrichment standards expire in 10-15 years.
Given Russia's economic interests and the P5+1's negotiating track record, Iran would almost be negligent in not attempting to extract additional big-ticket concessions. At this point, it makes little practical sense for the regime to simply pocket its existing accomplishments, as formidable as they've been.
...And ballistic missiles, too
Just as audaciously on Monday, Iran demanded the lifting of sanctions and other international restrictions related to the country's ballistic-missile construction.
Some experts have argued that the inclusion of ballistic missiles in the nuclear talks would only distract from the P5+1 objective of closing off Iran's pathways to an actual bomb. After all, Iran's long-range strategic missiles would be considerably less threatening under a deal that decisively blocked Iran's opportunities to go nuclear.
But the ballistic missiles are directly related to the issue. As Michael Eisenstadt of the Washington Institute for Near East Policy wrote on Tuesday, Iran has fitted some of its Shahab missiles with payload chambers resembling those used on nuclear-capable missiles as recently as 2004. It has also reverse engineered its own version of the Kh-55, which was the Soviet air force's primary nuclear-armed cruise missile.
Although Iranian negotiators reportedly insisted they weren't connecting ballistic missiles and the arms embargo to the nuclear talks specifically, the fact that these demands were raised in the context of the talks - complicating the negotiations just days before a crucial negotiating deadline - suggests that Tehran is expecting an overall re-orientation of the international community's stance toward the country in a post-deal environment. The Iranian regime is already looking forward to having far greater international prestige and freedom of action once the nuclear issue is resolved.
The effect on oil
They have every reason to believe this will be the case. A nuclear deal won't just leave Iran with a developed and internationally recognized nuclear program, the ability to build a nuclear weapon within as little as eight months, and perhaps the most sophisticated ballistic-missile arsenal of any non-nuclear weapons state. Tehran also believes a deal will burst open the country's oil-export economy.
According to a Citibank research note from June 30, the bank "expects that the Iranian government will, for demonstration effects, pump as much as is humanly possible, spiking or surging production through an aggressive ramp-up" of oil production once export restrictions are removed.
The bank does not believe Iran can reach its oil ministry's stated target of increasing output by 1 million barrels a day within seven months of sanctions being lifted. But it does think that a post-deal Iranian ramp-up could increase Iranian production by around 600,000 barrels a day within six months of the end of sanctions, bringing Iran's daily oil production to around 4.2 million barrels a day. Citibank believes oil experts could "ramp up considerably" toward the end of the first quarter of 2016.
A Barclays research note on Thursday similarly predicted that Iran will increase its production and its export capacity by 1 million barrels by the end of 2016, assuming a deal is signed (see chart).
BarclaysThe US is eager for an agreement, and the regime reasonably envisions a future where the country is a mainstream member of the international community - and an economic powerhouse, to boot.
Iran is naturally trying to press its advantage as the talks come down to the wire. It'\s negotiators understand that the country is in a favorable position, so long as it signs a deal.
The one remaining question is whether Iran's supreme leader, the central pillar of a regime with a deep ideological animus toward the US, will allow that to happen.