Overview: Iran Analysis Weekly Report July 17, 2016
July, 2016
Vistar Business Monitor
Pro-Rouhani officials praised the nuclear deal on the occasion of its one-year anniversary. Several senior officials released statements marking the anniversary of the Joint Comprehensive Plan of Action (JCPOA) by defending its accomplishments as Iranians increasingly doubt its payoffs. Foreign Minister Mohammad Javad Zarif tweeted that the nuclear agreement is “a triumph of diplomacy over coercion” but alluded to Iran’s uninspiring benefits from the deal, stating that “progress will remain elusive as long as short-sighted bragging, lackluster implementation of obligations, and tired slogans are preferred.” Expediency Discernment Council Chairman Ayatollah Akbar Hashemi Rafsanjani defended the nuclear deal’s “many accomplishments” but acknowledged that “they are far from the eyes of the people.”
Deputy Foreign Minister Abbas Araghchi confirmed that Iran and the U.S. have completed the purchase of 32 tons of heavy water that the U.S. Department of Energy had announced in April. Araghchi also stated that Iran is currently negotiating the sale of 44 tons of heavy water with Russia. Iran is required to sell its heavy water stockpile in excess of 130 tons in accordance with the nuclear agreement but had reportedly encountered difficulty finding buyers prior to the U.S. sale. Araghchi added that the P5+1 countries “have adhered to their commitments under the nuclear agreement so far.” Other Iranian officials including the Supreme Leader’s foreign policy advisor, however, have claimed that legislation passed by the U.S. House of Representatives to block Iran’s purchase of Boeing aircraft violates the nuclear deal.
Rouhani Administration Spokesman Mohammad Bagher Nobakht stated that “at least” 13 senior government officials have resigned or been fired due to their involvement in the scandal over exorbitant salaries for certain government employees.
Parliament elected three jurists to the twelve-member Guardian Council, the body that vets candidates for elections and approves parliamentary legislation. Parliament selected Abbasali Kadkhodaei, Mohammad Reza Alizadeh, and Seyyed Fazlollah Mousavi from a pool of candidates chosen by Judiciary Head Ayatollah Sadegh Amoli Larijani. Supreme Leader Ayatollah Ali Khamenei wields direct and indirect control over the Guardian Council’s composition, however. He appoints six of the twelve Guardian Council members, while the remaining six members are chosen from the candidates offered by the Judiciary head, who is himself appointed by Ayatollah Khamenei.
Also Supreme Leader Ayatollah Ali Khamenei re-appointed Ayatollah Ahmad Jannati, Hojjat ol Eslam Mohammad Reza Modarresi Yazdi, and Hojjat ol Eslam Mahdi Shabzendedar to another six-year term on the Guardian Council. Jannati is an ultraconservative cleric whom the Assembly of Experts, which is constitutionally charged with selecting the next supreme leader, elected as their chairman in late May. Parliament also selected two conservative-backed jurists and one reformist/moderate-backed jurist to fill three of the six slots for lawyers on the Guardian Council on July 13. The appointment of the three other clerics and the election of the three other lawyers on the twelve-member Council will take place at a later date. The Council staggers its elections so that not all seats are contested at the same time.
President Hassan Rouhani reportedly called an emergency meeting of the Supreme National Security Council (SNSC) following news of a military coup in Turkey.
Iranian media reported that there will be an emergency session of the SNSC, likely “early” on July 16, to discuss the developments in Turkey. The SNSC includes President Hassan Rouhani, top military officials, and a representative of Supreme Leader Ayatollah Ali Khamenei.
On the economic front, Iran pumped 3.63 million barrels of crude daily in June, which is the highest since 2011, OPEC reported. The cumulative increase since December has been 740,000 bpd. Earlier this week, Iran announced it has regained 80 percent of its pre-sanction market share, exporting some 2 million bpd of its total.
Also, Iranian officials on Tuesday approved the new Iran Petroleum Contract (IPC) deal after numerous delays between hardliners and more moderate elements of the government. As reported by the Iranian state media, the chief government economic advisory body (the Resistance Economy Headquarters) gave the go-ahead for the IPC including several amendments.
The main index of the Tehran Stock Exchange – TEDPIX – mostly moved in the negative territory over the past week. This was mainly because of the decline in prices of stocks that occurred at the beginning of the weekly trading last Saturday. TEDPIX dropped 0.4 percent to settle at 73,763 points. The value of transactions also decreased significantly and reached IRR 20,160 billion during the week while the average daily transaction value dropped by 12.7 percent.
The value of the greenback rose by 0.8 percent over the past week to settle at IRR 35,150. It rose to the IRR 35,000 handle. After a government approval that certain commodities will not be entitled to receiving discounted dollars, early signs of rising demand in the market appeared. Accordingly, we are expecting to see a rise in demand for the dollar in the market over the next weeks.
To subscribe the VBM Iran Analysis Report please visit http://vistarbm.com/Subscribe.aspx or send an email to contact@vistarbm.com.