It has been almost a year since President Donald Trump withdrew the U.S. from the 2015 Iran nuclear agreement, and one might think proponents of the move are feeling vindicated. Iran has stuck to the limits in the agreement on nuclear fuel, despite the re-imposition of crippling sanctions on its banks and oil exports. Yes, it is still making mischief in the region - but no more so than it was a year ago, and now with less than half the oil revenue. The dire predictions of the deal's supporters, meanwhile, have not come to pass.
Yet Iran hawks in Congress and the administration are worried that Trump will allow the deal to survive. They are waging a quiet war against Secretary of State Mike Pompeo and his special representative for Iran, Brian Hook. The goal is to force the State Department and Trump to end oil waivers granted to China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey. The waivers, granted last fall and set to expire May 2, allow them to continue to buy Iranian oil.
There is a deeply reported article in the Atlantic laying out the internal struggle. In some ways, this shouldn't be a fight at all: The State Department's official policy, as articulated by Pompeo himself, is to get Iran oil exports to zero.
So what is all the fighting about? The question is whether there will be enough surplus oil to stabilize the market if Iranian oil exports are slashed to zero. Trump has trashed the nuclear deal. But he has also acknowledged that he does not want to see the price of crude spike. Hook and Pompeo are trying to follow Trump's policy guidance and reduce Iran's oil exports to zero without disrupting the market.
The hawks in the administration, however, say there are more than enough oil producers willing to boost production to make up for any Iranian crude taken off the market. My Bloomberg colleagues have reported that the U.S. Energy Information Administration estimates that global crude supply will exceed demand by 180,000 barrels per day.
While the debate is technical, the issue - the survival of the Iranian regime - is existential, especially for the original opponents of the deal, such as National Security Adviser John Bolton. One administration official told me that the May 2 deadline was the administration's last realistic chance to end the oil waivers. The next deadline - Nov. 2 - will be too close to the election, and Trump will be loath to approve any measures that could possibly raise oil prices. At that point, Iran will have enough oil revenue to wait out Trump and hope a Democrat wins in 2020.
That could be complicated. Many Democrats who originally supported the 2015 deal were acknowledging its flaws by 2017, particularly its lack of any prohibition on missile testing and the sunset provisions that would lift limits on uranium enrichment by 2030. The very fact that Iran has remained in the deal since Trump announced the U.S. withdrawal suggests Kerry and his negotiators had more leverage to get concessions.
For now, it's Trump's policy to get the concessions that his predecessor didn't. From the perspective of the administration's Iran hawks, there is no chance of that unless he ends the oil waivers.
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