Iran Clashes With U.S. Over Nuclear Deal at IAEA Talks in Vienna

(Bloomberg) -- Top energy officials from the U.S. and Iran clashed on Monday with warnings that international peace is at risk as America’s sanctions noose tightens on the Islamic Republic.

The showdown took place at the International Atomic Energy Agency in Vienna, where hundreds of diplomats gathered for the nuclear watchdog’s annual meeting. IAEA inspectors are charged with monitoring the landmark nuclear accord between Iran and world powers that U.S. President Donald Trump abandoned in May.

“Let me be very clear about the negative consequences of this reckless act,” said Iran’s nuclear chief Ali Akbar Salehi, a key negotiator of the July 2015 accord. “This ominous move is doomed to have serious repercussions for regional and international peace and security.”

With less than seven weeks before the U.S. reimposes sanctions against Iranian oil exports, all sides are jockeying to win allegiances among allies and trading partners. While the other parties to the nuclear deal -- China, France, Germany, Russia and the U.K. -- continue to stick by the accord, their commitment has done little to convince companies to continue doing business with Tehran’s government.

In a message delivered by Energy Secretary Rick Perry, Trump told the IAEA delegates that Iran must be “permanently denied” any pathway to developing nuclear weapons, a remark that suggested Washington doesn’t want Iran to be able to maintain even the token enrichment capacity allowed under the deal.

“The JCPOA was a flawed deal that failed to address continued Iranian misconduct,” Perry said. The U.S. says that Iranian interference from Yemen to Syrian is responsible for helping to destabilize the Middle East.

The International Energy Agency has warned of higher oil prices as Iranian supply losses deepen heading into November. Iranian officials have cautioned their military may restrict passage through the Straight of Hormuz -- the world’s most important oil chokepoint -- if its tankers aren’t allowed access to world markets.

Iran continues to work with Russia and China on upgrading nuclear technologies and installations allowed under the deal, according to Salehi, who said the country will begin to expand its Bushehr atomic power plant from the third quarter of 2019. Salehi told Europe that “now is the time to uphold its commitments” made under the nuclear agreement.

Germany, France and the U.K. are working with the European Commission on special-purpose vehicles that would allow its members to swap goods without financial transactions with Iran.

“We hope that this deal will remain intact,” U.K. Foreign Office Minister Alan Duncan said in Vienna. The European Union similarly said that while it regretted U.S. abandonment of the it “remained committed” to its implementation, according to a statement.

To contact the reporter on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Alan Crawford, Tony Czuczka

©2018 Bloomberg L.P.