Research Briefing | Apr 25, 2021

MENA | Iran aims to wrap up JCPOA return before elections

Iran aims to wrap up JCPOA return before elections

Attempts to salvage the JCPOA have intensified as discussions through European intermediaries kicked off in Vienna on 6 April. Negotiators are already drafting proposals for the US and Iran to return to compliance. With presidential elections set to take place on 18 June and a sanctioned hardliner increasingly likely to win, we expect an agreement to be reached before then. However, failure to strike a deal before the elections may undo any diplomatic breakthrough achieved.

What you will learn:

  • Using the Oxford Economics Global Economic Model (GEM), we simulate the potential impact under two scenarios: a full return to the JCPOA by end-Q2 2021 and a lighter scenario envisaging reinstatement of some export waivers under an interim deal prior to an expected hardliner victory.
  • We estimate a return to the JCPOA could boost Iran’s GDP growth in 2021 to 6%, up 3.4pp from our baseline and surpassing pre-sanction levels by 2023.
  • Despite fears after an attack on an Iranian nuclear facility last week, prompting Iran to enrich uranium levels to 60%, significant progress has been made in a bid to revive the JCPOA following proximity discussions in Vienna on 6 April.

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