Iran flag and oil platform. Photo Credit: Tasnim News Agency
OilPrice.com: The Wild Card To Watch For Oil Markets In 2022
* The Iran nuclear talks have entered a critical stage, with Secretary Blinken claiming that there are only a few weeks left to reach an agreement
* If a deal is reached, the prospect of Iran bringing new supply onto the market will weigh heavily on oil prices
* Goldman Sachs has pushed its forecast for Iran ramping up production back to the second quarter of 2023, showing a lack of confidence in the talks
As talks on reviving the so-called Iranian nuclear deal enter a critical stage with the window of opportunity for a comprehensive agreement closing, oil markets are on edge once again about how the outcome of the ongoing negotiations would impact supply and demand balances later this year and early next year.
The Biden Administration launched in April 2021 indirect talks with Iran, via the partners in the Joint Comprehensive Plan of Action (JCPOA), about a possible return of the United States and Iran to the deal. Talks have been struggling since the start.
They were suspended for months until a new Iranian president and administration took office and were relaunched at the end of last year, with little progress made so far.
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WNU Editor: What's my take on an Iran nuclear deal and oil prices.
Regular readers of this blog know that I am not optimistic that an Iran nuclear deal will be reached. There is no common ground.
As a result I am very bullish for oil prices when these talks fail because it would not only tighten expected oil market balances for 2023 and 2024, but it could also increase tensions in the Middle East between the U.S. and Iran.
Bottom line. $100 per barrel of oil may look cheap in a year or two.
1 comment:
Putin has no interest in lower prices and Iran could care less about a nuclear agreement. Russia and China are calling the dance tunes as the west has no stomach to act as an enforcer on embargoes and sanctions. Biden is seen as weak after Afghanistan. China is buying oil from Iran and the US is doing what about it? Yup, nothing. Iran does not need us. Biden needs some kind of foreign policy win so he's desperate. That won't end well.
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