Although the hardliners of the Iranian
administration are determined not to revive the nuclear deal signed in 2015,
the moderates, led by President Rouhani, appear to be getting their way.
On the part of the US administration, the
indications are that they will do everything to revive the deal even if that
means caving into some of Iranian demands, if not all.
The bone of contention will be over how to
compensate for the loss of revenue by Iran due to crippling sanction imposed by
the Trump administration.
A plane load of cash this time, however, as it
happened in 2015, will not be political candy that can sell very well to the
American domestic audience regardless of the political affiliations.
As far as Iranian oil industry is concerned, the
moves are underway in hope that sanctions will be lifted in the near future. By
reading between the lines of their official communiques, both the US, European
Union and other stake holders are keen on getting Iran back to the fold; the
Uranium enrichment, however, is going to be the main sticking point.
When Iran is back in full swing, it is going to
alter the dynamics of the crude oil market. Since it is in dire need of
petro-cash, for how long that the Iranians will stick to self-imposed
production cuts exactly as other members do, as a member of the OPEC+ remains
to be seen.
Most Middle Eastern analysts believe that Iran will
increase its production even if it will not go down very with its regional
rival, Saudi Arabia.
At present, Iran is exempt from large production
cuts as it is still under the US sanctions.
In the next two weeks, two events are going to be
the key factors that determine the oil price: the OPEC+ meeting on March 4 and
the progress made in Iranian nuclear deal involving the West and Iran; oil
price that defied the usual influential factors, may certainly respond to these
events.
Iran is a country with significant oil and gas
reserves that will last decades to come at the current rate of production. Iran
will carefully play its cards while keeping its focus on ground realities –
with a bit of rhetoric for the domestic audience.
