Mikhail Ulyanov, Russia’s representative at the UN’s International Atomic Energy Agency, told it that there has been a major breakthrough in consultations on the Iran nuclear deal and that a major statement could be issued this Wednesday in response to the Iran nuclear deal, media reported on Tuesday, 18 EST.
Ulyanov has since clarified on social media, “I did not say that there was a breakthrough in the JCPOA (i.e. Iran nuclear deal)-related talks in Vienna, what I said was that, in my opinion, significant progress has been made, which is true. But there are still some unresolved issues. To finalize the agreement to resume the JCPOA, negotiators need more time and more efforts.”
International crude oil futures took a short dive after the news broke that the above Russian officials revealed significant progress in the agreement. In less than ten minutes, U.S. WTI crude oil futures fell briefly by about $1.8 to a new daily low of $64.11, expanding the intra-day decline from about 0.6% to more than 3%, although this decline did not last and has since narrowed to less than 3%.
Brent crude oil futures also set a new daily low, falling nearly $2 below $67.30 in less than 10 minutes, expanding from about 0.4% to more than 3% intraday, and then narrowing to less than 3%.
Starting earlier this month, parties involved in the Iran nuclear deal met in Vienna to discuss the resumption of U.S. and Iranian obligations under the Iran nuclear deal. Earlier this week, media said that U.S. and Iranian diplomats at the Vienna talks have hinted that a deal is in sight.
If a deal is finalized, the parties involved could restart negotiations on the Iran nuclear deal after withdrawing from it three years ago under the Trump administration. Iran would need to accept restrictions on its uranium enrichment activities again in exchange for the U.S. reversing tough sanctions imposed on Iran by the Trump administration, including on crude oil exports.
Some officials have revealed that Iran’s state-owned oil company, National Iranian Oil Company (NIOC), is making preparations to expand production from its fields and could expand exports as soon as a deal is reached, media said. In the most optimistic estimate, within just three months, Iran’s crude oil production could return to pre-U.S. sanctions levels of nearly 4 million barrels per day.
For his part, Mohammad Ali Khatibi, a former NIOC official and Iran’s OPEC ambassador, said, “Our (Iran’s) return (to the global oil market) may not be quick and sudden, but a gradual process that cannot come back overnight. This is not only because of the U.S. sanctions, but also because of the disruption of demand from the new crown epidemic.” Khatibi added that even if sanctions are lifted, some buyers may be reluctant to do business with Iran in the future.
In fact, the industry has been expecting the removal of U.S. sanctions on Iran since Biden took office. Paul Sheldon, chief geopolitical adviser at S&P Global Platts Analytics, recently predicted that this month’s fourth round of U.S.-Iranian talks will likely result in a framework agreement within weeks, with the U.S. easing sanctions on Iran’s oil, petrochemical, shipping and other industries.
Recent Comments