Market Still Waiting for Iranian Barrels

Copyright © 2021 Energy Intelligence Group

Oil market assumptions for a rapid return of Iranian oil exports may be giving way to questions about whether they will come back at all. Tehran and Washington are still far apart on a nuclear deal that would ease US sanctions on Iranian oil sales. Iran kept hope alive for fresh talks this week by granting the International Atomic Energy Agency (IAEA) greater insight into its nuclear program and vowing to continue collaboration with the Vienna-based watchdog. This averted a deeper crisis, but old issues remain unresolved between the US and Iran, and it remains unclear how Iran's new hard-line president, Ebrahim Raisi, will position the Opec country. Tehran's decision this week to allow the IAEA to service surveillance cameras at sensitive nuclear facilities and store data under joint IAEA and Iranian seals ensures that “immediate rectification” of these issues will happen, Rafael Grossi, the watchdog’s chief, said. By acquiescing, Iran avoided IAEA censure for obstruction of data collection and storage. The standoff had contributed to delays in starting a seventh round of nuclear negotiations, so the outlook for a renewed deal — the so-called Joint Comprehensive Plan of Action (JCPOA) — has improved. Indeed, Western officials are warning that any further delays — which give Iran more time to develop its enrichment activities — make a return to compliance with the original JCPOA harder. US negotiator Robert Malley earlier this month cautioned that Tehran's recent nuclear work would eventually make it impossible “to simply rewind the clock.” But other big issues remain. While the West seeks to address Iran’s nuclear advances, Tehran wants assurances from Washington that a future administration won’t withdraw from a revived JCPOA.

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