The U.S. and Iran are ramping up efforts to resolve a nuclear standoff that has global oil markets on edge and experts skeptical of success.
“It’s crunch time for these negotiations,” Helima Croft, global head of commodities strategy at RBC Capital Markets told CNBC’s Hadley Gamble on Tuesday, as representatives gathered in Vienna, Austria for “indirect talks” aimed at bringing both countries back into compliance with the 2015 nuclear deal.
“We’re going into election season in Iran in a couple of weeks, and if we don’t get a significant breakthrough in these negotiations, everything is likely to freeze,” she said.
While the talks are the most significant step forward yet in efforts to revive the deal, neither side expects a major breakthrough. Iranian officials want the U.S. to end Trump-era economic sanctions before returning to compliance — a concession Washington seems unwilling to accept.
“I don’t think we can expect very much,” Albert Wolf, an associate fellow at the Johns Hopkins School of Advanced International Studies, told CNBC on Tuesday.
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Skepticism over the talks was compounded by reports that European officials would act as intermediaries between the U.S. and Iran, rather than both sides meeting face-to-face to discuss the issues.
“There hadn’t even been any formal or informal talks between the U.S. and Iranian sides, so it looks as if at present time, these talks are going to be a bust,” Wolf said.
Others, including the former U.S. Energy Secretary Ernest Moniz, have said time is running out for the U.S. to engage in meaningful diplomacy. Iranian elections in June are widely expected to bring in a more hardline political leadership, following years of economic suffering brought on by Trump administration sanctions following Washington’s withdrawal from the deal in May 2018.
“We don’t underestimate the scale of the challenges ahead. These are early days,” State Department spokesman Ned Price said during a press call Monday.
“We don’t anticipate an early or immediate breakthrough, as these discussions we fully expect will be difficult. But we do believe that these discussions with our partners and, in turn, our partners with Iran is a healthy step forward.”
Price added: “We don’t anticipate at present that there will be direct talks with Iran, though, of course, we remain open to them. And so we’ll have to see how things go starting early this week.”