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IAEA Chief's Iran Visit Fuels Hopes of Nuclear Deal

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The head of the International Atomic Energy Agency (IAEA) will visit Tehran on Saturday for talks seen as part of a final make-or-break push to hammer out a new agreement to limit Iran's nuclear program and lift US sanctions on its oil exports.

The visit comes as negotiations in Vienna to revive the 2015 nuclear deal between Iran, the US and other nations have entered a critical phase. Just a few outstanding issues need to be addressed, but they will not be easy to resolve.

IAEA Director-General Rafael Grossi is due to meet the head of the Atomic Energy Organization of Iran (AEOI), Mohammad Eslami, and other Iranian officials.

While details of the one-day visit have not been released, the trip is believed to be linked to Grossi's efforts to draw up a roadmap to resolve questions between Iran and the IAEA about nuclear safeguards, Iran's Nournews agency reported.

If Grossi's visit to Tehran brings progress in this area it could remove a major obstacle to an agreement in Vienna, Nournews added.

There had been growing optimism recently that the Vienna negotiations could reach a successful conclusion as early as the end of this week.

But the weekend timing of Grossi's trip indicates that at least a few more days may be needed to finalize an agreement.

Tehran University's Mohammad Marandi, an adviser to Iran's negotiating team, said earlier this week that the talks could still fail if the US and the participating European nations "aren't prepared to meet Iranian requirements for assurances."

Quick Oil Output Boost

With negotiations in their final stages, Iran has reiterated that it can raise its oil production and exports swiftly.

The Opec member could boost its production to full capacity within two months or less, Oil Minister Javad Owji was quoted as saying by the official Shana news agency.

Iran's oil production capacity is estimated at around 4 million barrels per day and it is presently pumping roughly 2.5 million b/d.

Independent estimates of just how quickly Iran will be able to ramp up output vary, but Owji's forecast looks extremely ambitious.

Under Energy Intelligence's best-case "breakthrough" scenario, Iran's oil production would rise to 3.25 million b/d within three months and then gradually increase to 3.7 million b/d by the year's end.

That would imply a ramp up in exports to around 1.5 million b/d and 2 million b/d respectively, assuming levels of nearly 800,000 b/d in January of this year.

If a deal is struck and Iranian barrels do return to the market it could help alleviate supply concerns triggered by Russia's invasion of Ukraine.

While US and European sanctions have not targeted Russian oil and gas directly, there are indications that buyers have been shunning Russian crude because of financial and shipping sanctions and to avoid potential problems.

Those concerns drove Brent crude futures to an intraday high of almost $120 per barrel on Thursday — the highest level in almost 10 years.

"Now is the best time to come back to market and win back customers," a senior Iranian oil official told Energy Intelligence.

Topics:
Sanctions, Oil Supply
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