Iran May Be Getting More Out Of The Nuclear Deal Than The White House Is Letting On

But in its account of the deal, the White House appears to have fudged two key details of the deal dealing with concessions to Iran.

In its fact sheet on the agreement, the White House says that Iran must now "dilute below 5% or convert to a form not suitable for further enrichment its entire stockpile of near-20% enriched uranium before the end of the initial phase."

That's technically true, but it glosses over a key point.

The accord states that half of the 20%-enriched uranium will be converted into a powder fuel destined for the Tehran Research Reactor - you know, for research. However not everyone is convinced the fuel will be used for that purpose, and Israel has said it would be relatively simple to reconvert the powder back into the enriched uranium used to make a nuke. "They have no problem converting back what they allegedly turned to nuclear fuel," Israel's former military intelligence chief said earlier this year. "Within a week, it could be turned into nuclear material for a bomb."

Actually, there is disagreement concerning how long the reconversion process would actually take. Carnegie Endowment fellow Mark Hibbs says three weeks. As we reported, Harvard's Olli Heinon says two months, and that in any event reconversion is expressly prohibited by the agreement (which may explain why the White House omitted that fact). The Wall Street Journal says that the full process of reconverting the fuel and then constructing a nuke would take six months. Plus, the new inspection regimes are now daily, which increases the odds that any attempt at a "breakout" from the agreement to build a nuke detected in real time, though Hibbs says the reconversion process can be carried out on the sly.

Still, if you are convinced that any deal with Iran will prove faulty, this appears to be one escape valve that has been left open to them.

Secondly, the deal appears to have given Iran the opportunity to boost exports by up to 285 thousand barrels a day, even though the White House says current export restrictions will remain in place. This contradiction was first reported by Reuters' Daniel Fineren. More oil in world markets is good for the rest of us, and this fact may already be weighing on Brent crude prices, which fell as much as 2.5% overnight (though have since come up a bit) and remains below $110/barrel. But it will also help boost Iranian revenues.

Here's what actually happened: although restrictions on Western imports remain in place, the West also agreed to ease restrictions on selling insurance for products imported from Iran, something that applies to Asian countries who'd still been able to purchase Persian crude. The deal also says those countries must maintain the "current" amount of oil they now purchase from Iran. The deal benchmarks "current" amounts to the 1 million barrels per day average over the past 12 months.

However, the most recent IEA estimate puts exports at about 715 kbbl/d. Put these two facts - the insurance and the averaging of the benchmark - together, and you provide Iran with the the opportunity to put up to 285 thousand more barrels on the market.

In a follow-up email to BI, ClearView Energy Partners' Kevin Book offered an explanation of why this may have occurred:

"...we don't find it particularly surprising that last night's White House fact sheet made no mention of the relaxed E.U. sanctions. First off, E.U. shipping and insurance sanctions preceded the U.S. equivalent measures by a year, so the E.U. may have been deemed to have primary responsibility. Second, the Obama Administration may also have been seeking to deflect Congressional criticism of the Geneva deal by minimizing perceived benefits to Iran."

The consensus among most analysts remains that this is a solid deal, or at least a good start. But the details suggest Iran is getting more than you may have thought.