Iran oil exports will be in line with sanctions target: U.S.

UNITED NATIONS (Reuters) - The United States on Friday dismissed suggestions that Iran was exporting much more oil than it is allowed to sell under a preliminary nuclear deal with world powers and predicted that aggregate Iranian oil sales would meet targets set for Tehran.

The remarks from a senior U.S. official came ahead of a new round of senior-level negotiations between Iran and the United States, Britain, France, Germany, China and Russia in Vienna on April 8-9. It will be the third round of talks this year in the Austrian capital on a long-term deal with Iran.

Iran's oil exports have stayed above levels allowed under Western sanctions for a fifth month, the latest sign that the limited sanctions relief agreed upon in November is helping Tehran sell more crude, according to sources who track tanker movements.

Under the interim nuclear deal agreed in November in Geneva, Iran's exports are supposed to be held at an average 1 million barrels per day for the six months to July 20. But shipments to Asia have topped that level at least since November, according to ship tracking data.

The senior U.S. official said the United States had always expected fluctuations and was focusing on aggregate, not short-term, data.

"We have had teams talk to each of the importers of Iranian oil, and we feel comfortable that, in fact, they will meet the target that we have and there is nothing to lead us to believe otherwise at this time," the senior U.S. official told reporters in a conference call.

"We of course keep continuous eye on this," the official added.

Diplomats and intelligence officials say that while Iran has been negotiating with the six powers, it has kept up its efforts to circumvent the sanctions.

The latest example of that was announced by the U.S. Justice Department on Friday. It said that a Chinese citizen faces U.S. criminal charges that he conspired to export to Iran products that could be used in that country's nuclear program.

The senior official also reiterated U.S. concerns about reports Russia and Iran may be making progress on an oil-for-goods barter deal worth as much as $20 billion, saying it appeared inconsistent with the November deal and that if it went ahead, Washington could impose sanctions on those involved.

The aim of the Vienna negotiations is to hammer out a long-term deal by July 20 that would limit the scope of Iran's nuclear program in return for a lifting of sanctions that have crippled its oil-dependent economy.

DIFFICULT CHOICES

Iran denies Western allegations that it is seeking the capability to make nuclear bombs, saying its program is aimed at generating electricity and carrying out peaceful research.

It has defied U.N. Security Council demands that it halt uranium enrichment and other sensitive nuclear activities, which has led to multiple rounds of increasingly draconian U.S., European Union and U.N. sanctions.

The U.S. official said Iran will have to make some difficult choices about the future of its nuclear program if it is to reach an agreement with the six world powers that would bring an end to international sanctions against the Islamic Republic.

"It's about the choices Iran has to make, and some of them are very difficult," the official said.

"In order to ensure that they will not obtain a nuclear weapon and that the international community has the assurances it needs that their program is entirely and exclusively peaceful, they will have to make some significant changes and some significant choices," the official added.

The senior U.S. official declined to elaborate on what the biggest choices facing Iran involved, but diplomats close to the talks say that the fate of the Arak reactor that could yield bomb-grade plutonium and the scope of Iran's uranium enrichment research and development program are among the sticking points.

Iran has ruled out shutting down Arak, as the United States and European powers would prefer. U.S. officials have suggested that Iran could modify the reactor so that it would not be able to produce much plutonium at all.

The head of Iran's atomic energy organization, Ali Akbar Salehi, in February signaled some flexibility, saying it was prepared to modify Arak to help allay any concerns.

So far, U.S. and European officials say, Iran and the five permanent U.N. Security Council members plus Germany have not started drafting an actual proposal. But the U.S. official said they were on schedule with a workplan agreed among the seven nations and the EU, which is helping coordinate the talks.

"We are on pace with that workplan, looking toward beginning the drafting in May," the official said.

Diplomats said that U.S. Under Secretary of State for Political Affairs Wendy Sherman, the head of the U.S. delegation at the talks, was expected to hold more bilateral talks next week with Iran's delegation, which is headed by Iranian Foreign Minister Mohammad Javad Zarif and his deputy, Abbas Araqchi.

Such regular close contact between senior U.S. and Iranian officials would have been virtually unthinkable a year ago. Iran has said repeatedly since pragmatist Hassan Rouhani was elected president last year that it wants to improve relations with Washington, which broke off ties in 1980.

(Reporting by Louis Charbonneau; Additional reporting by Arshad Mohammed in Washington; Editing by Dan Grebler)