Iran may pause enrichment for US nod on nuclear rights, release of frozen funds, Iranian sources say
An Iranian newspaper with a cover photo of Iran's Foreign Minister Abbas Araqchi and U.S. Middle East envoy Steve Witkoff, is seen in Tehran, Iran, April 12, 2025. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS/ File Photo
Iran may pause enrichment for US nod on nuclear rights, release of frozen funds, Iranian sources say
DUBAI - Iran may pause uranium enrichment if the U.S. releases frozen Iranian funds and recognises Tehran's right to refine uranium for civilian use under a "political deal" that could lead to a broader nuclear accord, two Iranian official sources said.
The sources, close to the negotiating team, said on Wednesday a "political understanding with the United States could be reached soon" if Washington accepted Tehran's conditions. One of the sources said the matter "has not been discussed yet" during the talks with the United States.
The sources told Reuters that under this arrangement, Tehran would halt uranium enrichment for a year, ship part of its highly enriched stock abroad or convert it into fuel plates for civilian nuclear purposes.
A temporary pause to enrichment would be a way to overcome an impasse over clashing red lines after five rounds of talks between Iranian Foreign Minister Abbas Araqchi and Trump's Middle East envoy Steve Witkoff to resolve a decades-long dispute over Tehran's nuclear programme.
U.S. officials have repeatedly said that any new nuclear deal with Iran - to replace a failed 2015 accord between Tehran and six world powers - must include a commitment to scrap enrichment, viewed as a potential pathway to developing nuclear bombs.
The Islamic Republic has repeatedly denied such intentions, saying it wants nuclear energy only for civilian purposes, and has publicly rejected Washington's demand to scrap enrichment as an attack on its national sovereignty.
In Washington, a U.S. official told Reuters the proposal aired by the Iranian sources had not been brought to the negotiating table to date. The U.S. State Department and Iran's Foreign Ministry did not immediately respond to requests for comment on this article.
The Iranian sources said Tehran would not agree to dismantling of its nuclear programme or infrastructure or sealing of its nuclear installations as demanded by U.S. President Donald Trump's administration.
Instead, they said, Trump must publicly recognise Iran's sovereign right to enrichment as a member of the nuclear Non-Proliferation Treaty and authorise a release of Iranian oil revenues frozen by sanctions, including $6 billion in Qatar.
Iran has not yet been able to access the $6 billion parked in a Qatar bank that was unfrozen under a U.S.-Iranian prisoner swap in 2023, during U.S. President Joe Biden's administration.
"Tehran wants its funds to be transferred to Iran with no conditions or limitations. If that means lifting some sanctions, then it should be done too," the second source said.
The sources said the political agreement would give the current nuclear diplomacy a greater chance to yield results by providing more time to hammer out a consensus on hard-to-bridge issues needed for a permanent treaty.
"The idea is not to reach an interim deal, it would (rather) be a political agreement to show both sides are seeking to defuse tensions," said the second Iranian source.
Western diplomats are sceptical of chances for U.S.-Iranian reconciliation on enrichment. They warn that a temporary political agreement would face resistance from European powers unless Iran displayed a serious commitment to scaling back its nuclear activity with verification by the U.N. nuclear watchdog.
Even if gaps over enrichment narrow, lifting sanctions quickly would remain difficult. The U.S. favours phasing out nuclear-related sanctions while Iran demands immediate removal of all U.S.-imposed curbs that impair its oil-based economy.
Asked whether critical U.S. sanctions, reimposed since 2018 when Trump withdrew Washington from the 2015 pact, could be rescinded during an enrichment pause, the first source said: "There have been discussions over how to lift the sanctions during the five rounds of talks."
Dozens of Iranian institutions vital to Iran's economy, including its central bank and national oil company, have been sanctioned since 2018 for, according to Washington, "supporting terrorism or weapons proliferation".
Iran's clerical establishment is grappling with mounting crises - energy and water shortages, a plunge in the value of its currency, losses among regional militia proxies in wars with Israel, and growing fears of an Israeli strike on its nuclear sites - all exacerbated by Trump's hardline stance.
Trump's revival of a "maximum pressure" campaign against Tehran since he re-entered the White House in January has included tightened sanctions and threats to bomb Iran if current negotiations yield no deal.
Iranian officials told Reuters last week that Tehran's leadership "has no better option" than a new deal to avert economic chaos at home that could jeopardise clerical rule.
Nationwide protests over social repression and economic hardship in recent years met with harsh crackdowns but exposed the Islamic Republic's vulnerability to public discontent and drew more Western sanctions over human rights violations. REUTERS
Join ST's Telegram channel and get the latest breaking news delivered to you.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
30 minutes ago
- Business Times
Oil climbs 2% to two-week high on geopolitical tensions
[NEW YORK] Oil prices climbed about 2 per cent on Tuesday to a two-week high as persistent geopolitical tensions between Russia and Ukraine, and the US and Iran looked set to keep sanctions on both Opec+ members Russia and Iran in place for longer. Brent crude futures rose US$1, or 1.5 per cent, to settle at US$65.63 a barrel, while US West Texas Intermediate (WTI) crude rose 89 cents, or 1.4 per cent, to close at US$63.41. 'Risk premium has ramped up this week as the prospect of a Russia/Ukraine ceasefire as well as an Iranian nuclear deal now appear to have been pushed back for weeks if not months,' analysts at energy advisory firm Ritterbusch and Associates said in a note. Russia said work on trying to reach a settlement to end the war in Ukraine was extraordinarily complex and that it would be wrong to expect any imminent decisions but that it was waiting for Ukrainian reaction to its proposals. Russia is a member of the Opec+ group that includes the Organization of the Petroleum Exporting Countries and allies, and was the world's second biggest producer of crude in 2024 behind only the US, according to US energy data. Opec member Iran, meanwhile, was set to reject a US nuclear deal proposal that would be key to easing sanctions on the major oil producer. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Iran was the third biggest producer of crude in Opec behind Saudi Arabia and Iraq in 2024, according to US energy data. In Canada, wildfires burning in Alberta have affected more than 344,000 barrels per day of oil sands production, or about 7 per cent of the country's overall crude output, according to Reuters calculations. Demand growth? In Europe, Euro zone inflation eased below the European Central Bank's (ECB) target last month on surprisingly benign services costs, underpinning expectations for further policy easing even as global trade tensions fuel longer-term price pressures. Central banks like the ECB use interest rates to keep inflation in check. Lower interest rates can spur economic growth and demand for oil by reducing consumer borrowing costs. But, in the US, Chicago Federal Reserve President Austan Goolsbee said higher inflation from US import tariffs could become evident quickly, but he said it would take longer to see a tariff-induced economic slowdown. The Organisation for Economic Co-operation and Development (OECD), however, revised down its forecast for global economic growth as the fallout from US President Donald Trump's trade war takes a bigger toll on the US economy. US job openings increased in April, but layoffs posted their biggest rise in nine months, suggesting that labor market conditions were softening amid a dimming economic outlook because of tariffs. The US has asked countries to make their best offers on trade negotiations by Wednesday as US officials ramp up efforts to deliver multiple agreements to Trump before a self-imposed deadline just five weeks away. Weekly US crude draw seen Analysts forecast energy firms pulled about 1.0 million barrels of crude from US stockpiles last week, reducing inventories for a second week in a row. That compares with an increase of 1.2 million barrels during the same week last year and an average decrease of 2.3 million barrels over the past five years (2020-2024). The American Petroleum Institute (API) trade group and the Energy Information Administration (EIA) release weekly US oil inventory data on Tuesdays and Wednesdays, respectively. REUTERS

Straits Times
32 minutes ago
- Straits Times
Riding wave of voter anger, South Korea's Lee Jae-myung now faces policy challenges
Mr Lee Jae-myung's ability to lead will be judged by the strength of his policies. PHOTO: REUTERS SEOUL - South Korea's new President Lee Jae-myung rode a wave of voter anger against the December martial law attempt by his ousted predecessor, but his ability to lead will be judged by the strength of his policies. With preliminary results suggesting a comfortable win over Mr Kim Moon-soo, the candidate for the conservative People Power Party, Mr Lee will take office with a resounding mandate and his Democratic Party in control of parliament. Healing the political rifts that led to former President Yoon Suk Yeol's shock martial law and its divisive aftermath will be a tall order. Analysts say both candidates were vague on their policy plans during the campaign, and Mr Lee Jun-han, a political science professor at Incheon National University, said the results are more an indictment of Yoon and his PPP's poor performance than an endorsement of the DP. He said Mr Kim, who opposed Yoon's impeachment, was unprepared and the PPP did not show remorse after the martial law. "(The next president) should properly interpret that the people's choice has been one-sided and reflect that in the government's operation or politics in the future," he said. "If they don't, public sentiment will fluctuate quickly." While Mr Lee has had his eye on the presidency for years, there have been major developments since he narrowly lost to Yoon in the 2022 election, said Mr Kim Jun-seok, a political science professor at Dongguk University. "Now he has restoration of democracy as one of his tasks," Mr Kim said. "Nonetheless, there are huge challenges faced by South Korea. A grim outlook on the economy that's projected to grow maybe less than 1 per cent. And there's a crisis outside, dealing with Trump. He has a lot of work to do." Voters said they were looking for the winner of the snap election to calm the economic and political shocks that have roiled the country since Yoon's Dec 3 martial law decree led to months of economic downturn and sparked nationwide protests. Many complained, however, about a lack of specifics in policy debates. Mr Lee has pledged to draft a second supplementary budget for the year as soon as the election is over, and promised vouchers to help local businesses and subsidies for childcare, youth, and the elderly to address growing discontent around tightening purse strings. His camp says they intend to seek more time to negotiate on trade with US President Donald Trump, but it is unclear how any request for an extension of the tariff deadline will be received in Washington. With a rise in anti-China sentiment among South Koreans and Trump's push to isolate Beijing, Mr Lee must also tread carefully with any plans to improve ties with China. Mr Lee has also shown sensitivity to the political winds, moderating some of his stances on China, Japan, and populist economic policies such as universal income ahead of the election. "I hope he will resuscitate the economy and get rid of insurrection forces," said small business owner Im Young-taek, 64. "And I do really hope he will make people comfortable. Things may not be easy with Trump but I hope he will hire capable aides and resolve the issues well." Mr Lee's Democratic Party will control parliament, easing the passage of legislation and budgets after years of deadlock between Yoon and the legislature. That may do little to soothe political polarisation, however, with conservatives warning that Mr Mr Lee and the DP will steamroll over any opposition. "They have absolute power, which could lead to a departure from social unity," said Incheon University's Mr Lee. "Since they are the absolute majority, there seems to be little check and balance to stop them." In May a DP-led committee passed legislation aimed at changing an election law that Lee has been convicted of violating. They have also promised to pass legislation clarifying what protections presidents have from criminal investigations, a move seen as trying to reduce Lee's exposure to other ongoing charges. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.

Straits Times
32 minutes ago
- Straits Times
South Korea's new leader Lee Jae-myung to seek more time for US trade talks
Mr Lee Jae-myung, will take office hours after winning the June 3 snap presidential election without a usual two-month transition period. PHOTO: REUTERS South Korea's new leader Lee Jae-myung to seek more time for US trade talks SEOUL - The new South Korean administration will likely make efforts to buy time for US trade talks, as it studies the negotiations of bigger neighbours Japan and China for leverage, according to sources familiar with the ruling party's thinking. President Lee Jae-myung, who is due to take office hours after winning the June 3 snap presidential election without a usual two-month transition period, said on the eve of the elections that 'the most pressing matter is trade negotiations with the United States'. The future of South Korea's export-oriented economy will hinge on what kind of deal Mr Lee can strike, with all of his country's key sectors from chips to autos and shipbuilding heavily exposed to global trade. The new president and his liberal Democratic Party government inherit an economy that is expected to grow this year by a grim 0.8 per cent, the weakest since 2020, and will need to unify a country deeply polarised by ousted President Yoon Suk Yeol's botched martial law attempt. South Korea and other countries may face further pressure, as a draft letter seen by Reuters showed the Trump administration wanted countries to provide their best offer on trade negotiations by June 4. A trade ministry official declined to confirm if Seoul had received the letter. But the transition of power after a six-month leadership vacuum provides Seoul with an excuse to slow down its negotiations and observe Washington's tariff talks with other countries, lawmakers, officials and trade experts from the Democratic Party said. "The new administration will need to take a fresh look at the overall framework of the negotiations and that will be a buffer to buy time, which the US cannot reject," said a trade expert who took part in brainstorming for Mr Lee's trade strategies. The sources added the administration may not be able to immediately ask Mr Trump for an extension, and Mr Lee's top diplomacy adviser has said he sees such a request being considered only after reviewing the progress. Still, prolonged negotiations by other countries may help to buy Seoul time. "It will be strategically right to take a wait-and-see stance because the situation is changing within the United States and around negotiations of other countries," one lawmaker said. Strategic silence South Korea, a major US ally and one of the first countries to engage with Washington after Japan, agreed in late April to craft a "July package" scrapping levies before the 90-day pause on Mr Trump's reciprocal tariffs is lifted, but progress was disrupted by continued upheavals in South Korea's leadership. Mr Lee has since stressed there is no need to rush into clinching a deal and the deadline of July 8 set between Seoul and Washington should be reconsidered. During his election campaign, Mr Lee did not make specific comments about contentious issues around the trade talks. That "silence" was a strategic move, a party official said. In a statement after his victory, the Korea International Trade Association called for Mr Lee to "respond quickly to the rapidly changing foreign trade order" and use all of the government's diplomatic and trade resources to pursue a practical negotiation strategy. Mr Trump's across-the-board tariffs on trading partners, including 25 per cent duties on South Korea, have been the subject of ongoing litigation, but remain in place. "For different reasons, China and Japan will be references for us, with the former on the possibility of US policy changes and the latter on how to make moves under a similar circumstance," another trade expert said. Japan, another US ally slapped with 24 per cent tariffs, no longer sees merit in striking a quick deal, unless it is granted an exemption from 25 per cent product-specific duties on its key industry of automobiles, also a major sector for South Korea. China agreed with the US to significantly unwind their tariffs on each other in a 90-day truce signed in mid-May, but Mr Trump last week accused Beijing of violating the agreement and threatened to take tougher actions. When it comes to joint responses to US tariffs, there is a higher possibility with Japan than China, two sources said, citing shared interest in energy purchases and auto tariffs. Mr Lee's party expects there to be some "two-track" transitional period, with current officials continuing negotiations as the new administration formulates its strategies, according to the official. Better positioned Given its strength in key sectors of US interest, such as shipbuilding and technology, some analysts see South Korea as better positioned than others in the region, as Seoul prepares a separate package of industrial cooperation for bargaining power. "Successful outcomes require offers that support the president's domestic agenda, and this will be comparatively easy for Korea given its importance in politically sensitive industries," said Mr Jay Truesdale, a former US diplomat and CEO of TD International, an advisory firm in Washington, D.C. Ms Kathleen Oh, Morgan Stanley's chief Korea and Taiwan economist, said: "We believe there may be more channels and enough scope for Korea to work out a deal compared to, let's say, its exporting peer Taiwan." South Korea has the scope to decrease its trade surplus with the US via more import purchases, while it can also offer to lower tariffs on agricultural products, particularly rice, quoted by Trump as a high tariff example, Ms Oh said. But, for the Lee administration, that is more the reason it does not have to rush, the second trade expert said. "In the worst-case scenario, if tariffs are adjusted after we sign an agreement, that might mean we made unnecessary concessions," the source said, adding "it's not like we don't have any leverage". REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.