The Iran Nuclear Deal Won't Happen Any Time Soon | WHAT REALLY HAPPENED

The Iran Nuclear Deal Won't Happen Any Time Soon

Authored by Cyril Widdershoven via OilPrice.com,

Global oil markets have been on edge recently due to the continuing JCPOA discussions and the possibility of the U.S. rejoining the deal. While there have been no real breakthroughs in the discussions so far, the possibility of Iranian oil exports coming back online is adding downward pressure to oil prices. Despite this added pressure, international oil benchmark Brent is still firmly above $70, and oil price optimism is only increasing. This optimism is due to the growing global demand for oil and petroleum products and is also driven by warnings from U.S. diplomats that Iranian sanctions are far from over. U.S. Secretary of State Antony Blinken stated to the press that “even in the event of a return to compliance with the JCPOA, hundreds of sanctions will remain in place, including sanctions imposed by the Trump Administration”.

This blunt but clear approach has given analysts confidence that additional Iranian oil volumes will not be entering the market any time soon. When it does enter the market, Iranian oil is almost certainly going to be priced at normal levels as Tehran will need the revenues to fund its failing economy and support IRGC linked projects and proxies. Blinken also stated yesterday to a Senate Foreign Relations Committee that Iran is rapidly developing its nuclear program. To block this, according to the Biden Administration, the U.S. needs to return to the 2015 JCPOA deal. In the view of the Democrats, the Trump sanctions and leaving of the JCPOA have been partly responsible for the current Iranian program.

Republicans, however, are still supporting a hardline approach to Iran, an approach that even some Democrats support. Democrat Senator Bob Menendez, the committee’s chairman, has been a leading opponent of the original JCPOA crafted under Democratic President Barack Obama. Republicans and several Democrats want the new JCPOA discussion to include Iran’s continued pursuit of ballistic missiles and support of proxies.

Before Blinken’s statement about sanctions staying in place, analysts had already suggested that a flood of Iranian oil was unlikely as production levels were constrained, outlets unavailable, and customers uncertain. Also, even if sanctions were lifted, Iran would potentially be part of the OPEC+ export agreement. If that were the case, it would stop a serious oil glut scenario from happening. Saudi Arabia, Abu Dhabi, and Russia would not be interested in destabilizing the oil market by allowing Iran to flood the market.

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