Thursday’s Iranian nuclear deal is unequivocally a good one. It is good news for the Iranian people, who can look forward to financial relief. It is good for the Middle East, which is spared yet another conflict in the short term, and can hope for better trade relations and the future integration of Iranian energy resources.
The accord, between Tehran and the P5+1 negotiating group, is also a great result for the United States, Europe and Iran’s neighbours, with any chance of an Iranian nuclear weapon put off by at least 10 years. Serious analysts, even sceptical or hawkish ones, are surprised by the strength of the constraints. For a direct cost of $100 billion or more, and economic losses well in excess of that, Iran has achieved no tangible gains from its nuclear programme.
Of course, this agreement is only a framework, and much detailing is required by the next deadline of June 30. A key point of contention is how fast sanctions are lifted in return for Iranian compliance, with the foreign minister Javad Zarif apparently expecting they would be eased immediately.
More likely, although some oil customers may jump in early, the sanctions thicket will begin to be unravelled during 2016, with about 800,000 barrels per day returning to the market.
For energy suppliers and consumers, this is a time of many potential geopolitical threats: extremist attacks on Iraqi and Sinai pipelines and Algerian gasfields; possible blockades of the Bab El Mandeb or Strait of Hormuz; closures of Libyan oil ports; the collapse of the Syrian and Yemeni oil industries.
But few of these have materialised in significant disruptions. One of the two major exceptions is now likely to be reversed.
The nuclear deal thus enhances regional energy security in just one aspect, albeit an important one. It does not hand over the keys of the Arabian Gulf to Tehran, but neither does it necessarily open a new era of peaceful coexistence.
Some fear that a richer Iran, with more money from expanded oil exports, will create more trouble in the region. History and logic do not support this. The high point of Iranian involvement in Syria, Iraq and now Yemen has overlapped quite closely with stringent oil sanctions from 2012 onwards. Even if sanctions are lifted, Iran’s 2013 oil revenues of $61.9bn are likely to fall to about $38bn next year because of sharply lower prices.
New trade and business relations are more likely to restrain Tehran than to empower it. Lower oil prices are uncomfortable for both Iran and its Gulf neighbours, but also encourage more diverse and interconnected economies.
Iran has not created the region’s weak and failing states, but it has exploited and exacerbated them where it has found an opening. At the same time, extremists pose genuine threats to it on both its western and eastern borders.
The very multiplicity of non-state groups in conflicts across the Middle East – the Houthis, ISIL, Hizbollah, Al Qaeda affiliates, tribes and city-state brigades, secular oppositionists and irregular militias – show the current turmoil is not some grand sectarian conflict, even if some try to make it so.
Beyond narrow physical protection of facilities, the security of the Middle East’s energy resources, its lifeblood, is inseparable from the restoration of order and law. Military operations will not bring solutions. These conflicts can be resolved only by a holistic combination of force – where necessary to remove intractable enemies such as ISIL and the Syrian president Bashar Al Assad – with diplomacy, then the comprehensive political and economic renewal of weak, oppressive and incompetent states.
That renewal is not possible without the involvement of one of the regional heavyweights. Last week’s nuclear deal does not guarantee Iran’s constructive engagement, but it is the first step to making it possible.
Robin Mills is the head of consulting at Manaar Energy, and author of The Myth of the Oil Crisis