Speculation is growing about a deal between the United States and Iran reviving the stalled nuclear agreement, letting additional Iranian crude oil enter the markets. But efforts to sabotage the agreement are apparent.
The return of Iranian crude is important to the United States for various reasons. U.S. President Joe Biden needs lower prices at American gas stations, especially in a mid-term election year.
And if the nuclear deal is renewed, additional crude from Iran could help fill the gap in global oil supplies, especially since the European Union is set to ban Russian oil imports by the end of 2022. A Bloomberg report on Thursday said if the nuclear deal is renewed, Iran’s state oil producer would pursue customers in countries such as Greece, Italy, Spain and Turkey. That could take some pressure off the global oil markets.
The deal becomes more critical to Biden given Saudi Arabia’s unwillingness to open its oil taps further. The Saudis don’t seem willing to oblige Biden and make more oil available. On the contrary, as markets appear to weaken, Saudi Arabia has indicated that major Organization of Petroleum Exporting Countries (OPEC) could cut output.
Citing Energy Minister Prince Abdulaziz Bin Salman, Bloomberg reported that Saudi Arabia might be pushing for US$100-a-barrel oil. A week ago, in an unusual intervention, the minister said he didn’t like the yo-yo pricing he saw in the market. With Brent crude oil falling toward a six-month low of US$90 a barrel, he said “cutting production at any time” was an option for OPEC+.
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Left unsaid, but clearly implied, is the real concern that oil prices are getting too low for no good reason, according to the Saudis, Bloomberg reported. Additional oil supplies, courtesy of an Iran nuclear deal, could cause the prices to plunge. Many read the comments from the minister in that light.
And the Saudis aren’t alone in trying to stall a deal between Iran and the U.S.
Israel is also vehemently opposed to any deal. A high-level Israeli delegation has been in Washington, apparently in a last-ditch effort to press Biden to stick to former president Donald Trump’s strategy of applying maximum pressure on Iran rather than renewing the deal.
Israeli national security adviser Eyal Hulata visited the White House on Tuesday and met his U.S. counterpart, Jake Sullivan. He raised Israel’s concerns about the latest draft roadmap to a revival of the 2015 agreement, Politico reported. Israeli Defence Minister Benny Gantz also met Sullivan on Friday to express concerns.
And in a series of tweets, former Israeli prime minister Naftali Bennett urged the U.S. “even now at this last minute,” to walk away from the talks, whose result, he feared, would enrich a dangerous and untrustworthy Iranian regime.
“One way or another, the State of Israel is not a party to the agreement,” Bennett warned, reiterating a longstanding Israeli position. “Israel is not committed to any of the restrictions stemming from the agreement and will utilize all available tools to prevent the Iranian nuclear program from advancing.”
There’s also stiff opposition within Iran to any deal with the United States. Some media focused on news that the U.S. has rejected Iran’s three demands spelled out in its response to a European Union proposal.
France 24 said that the U.S., in its reply to the EU proposals, rejected the Iranian demand to allow it to preserve the centrifuges used for uranium enrichment. Iranian wanted it as insurance against the possibility of a future U.S. administration opting out of the deal again, as the Trump administration did. Instead, the U.S. reportedly wants Iran to reverse its nuclear program and return to its March 2015 status.
Iran has also been pressing for an end to the International Atomic Energy Agency’s (IAEA) enquiry about the origin of uranium traces found in three Iranian sites. The United States wants Iran to give a convincing explanation to the IAEA on the issue. Some reports say the U.S. has also refused to lift sanctions on the Iranian Revolutionary Guards.
In the wake of all this, the editor of hardline Iranian daily newspaper Kayhan, Hossein Shariatmadari, wrote in a commentary that the deal was a golden document for the U.S. and a catastrophic agreement for Iran.
So, several efforts are underway to sabotage the deal. The outcome of negotiations will have a big impact on oil markets and the geopolitics of the oil-rich Middle East. And all the parties well know the stakes.
Toronto-based Rashid Husain Syed is a respected energy and political analyst. The Middle East is his area of focus. As well as writing for major local and global newspapers, Rashid is also a regular speaker at major international conferences. He has provided his perspective on global energy issues to the Department of Energy in Washington and the International Energy Agency in Paris.
For interview requests, click here.
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