Prisoner Swap Could Pave Way For Iran Diplomacy But Obstacles Remain

Iran and the US may exchange prisoners as early as Monday 18 Sept as part of a deal which includes the unfreezing of USD$6billion of frozen Iranian oil revenue. Although the deal itself is unlikely to be market moving, it may be the most significant milestone toward resumption of nuclear talks with Iran.

• We highlighted earlier this month that efforts are being made to conduct an informal meeting of the signatories to the 2015 JCPOA deal on the margins on the UN General Assembly next week. If the prisoner swap goes ahead on Monday it might signal progress towards restarting diplomatic channels on Tuesday.
• Additionally, a recent IAEA report found that Iran had decelerated its uranium enrichment programme - a key demand of the US.
• However, the European JCPOA signatories released a critical statement today stating that, "Iran persists in its deliberate refusal to engage earnestly with the [IAEA]" - another key demand from US.
• Moreover, the financial side of the deal has prompted Republican accusations that the deal endorses Iranian hostage taking despite Administration assertions that the funds are rightfully Iran's. Any future diplomatic deal with Iran will require some level of approval from a hawkish Congress.