As oil hovers at near $100 a barrel for the first time since the Obama – Biden years, analysts around the world have begun operating on the assumption that high oil prices would help drive Biden to renew the Obamabomb nuclear deal with Iran.
Iran is preparing for a possible lifting of the U.S. sanctions on its oil exports in case a deal is reached in the ongoing nuclear talks, as the Islamic Republic seems to have accelerated the transfer of millions of barrels of crude onto tankers in recent weeks.
The volume of crude oil on tankers around Iran has surged by 30 million barrels since the start of December and is now around 103 million barrels in floating storage, Bloomberg reported on Wednesday, citing data from commodity intelligence firm Kpler.
If a deal is reached, Iran could return some 1.3 million barrels per day (bpd) of crude to the tight oil market, and its oil in floating storage would be the first to go to international buyers until the Islamic Republic ramps up its oil production to pre-2018-sanction levels.
Investors are also watching talks between the United States and Iran. The Iranian foreign minister said Iran was “in a hurry” to reach a swift agreement in nuclear talks in Vienna, provided its national interests are protected.
“A nuclear deal between the United States and Iran could release 1.3 million barrels of supply, but this will not be sufficient to ease the supply constraints,” said Pratibha Thaker, the Economist Intelligence Unit’s editorial director for the Middle East and Africa.
A rise in summer travel and falling spare capacity could send prices to $120 a barrel, Bank of America (BofA) Global Research said on Tuesday.
Not so fast, analysts at Citi say. They point to the possible unwinding of U.S. sanctions on OPEC member Iran as diplomats on both sides say progress is being made in talks.
A deal could add about half a million barrels per day (bpd) into the market by April or May and 1.3 million bpd by the end of the year, which, along with a rise of around 2.8 million bpd from Canada, Brazil, Iraq, Venezuela and the United States, could push prices below $65 a barrel.
"Most market analyses of prices for the year ahead have focused on a lack of surplus production capacity and have ignored the likelihood of a return of Iranian oil to markets", Citi said.
Iran’s foreign minster said on Wednesday that it wants to settle the remaining issues in the coming days, but that it won’t concede on its red lines “under any conditions.” Any restoration of Iranian barrels to the global market would help ease tightness.
The U.S. is in discussions with oil exporters and importers to try to smooth fallout from any escalation in hostilities and sanctions related to the situation in Ukraine, Daleep Singh, Biden’s deputy national security advisor, said at the White House. The talks include the possibility of tapping strategic oil reserves on top of the plan announced last year, he said.
Meanwhile in the Persian Gulf, Iran is moving more oil onto ships to speed up exports should the Iran nuclear deal be revived. While it would need a few months to ramp up production, Iran could restore about 1 million barrels a day of supply to global markets, Vitol Group CEO Russell Hardy said in a Bloomberg Television interview this week.
Efforts by governments to drive an economic rebound are likely to add strain to tight oil supplies and could send prices to fresh peaks, unless international talks end sanctions on Tehran and lead to a surge in Iranian exports analysts believe.
Back in 2017 in our article “Even UN Says Iran Not Complying With Obama Nuclear Weapons Deal,” we explained that the deal Obama made with the Islamic Republic of Iran lacked a specific inspection mechanism in the provision that prohibits the mullahs from pursuing nuclear weapons research.
In a stunning example of why Obama’s nuclear weapons deal was tantamount to treason against the United States, unlike many other parts of the deal, the provision, known as Section T, makes no mention of International Atomic Energy Agency inspection or any specifics of how it will be verified.
Section T bans "activities which could contribute to the development of a nuclear explosive device". It lists examples such as using computer models that simulate a nuclear bomb, or designing multi-point, explosive detonation systems.
Just in case that wasn’t clear – what the deal says is there’s no specific verification procedure of the section of the treaty that actually prohibits Iran from developing a nuclear weapon.
The International Atomic Energy Agency (IAEA) was never able to verify Iran was implementing Section T because the relevant activities would be occurring on military sites and Iran barred the IAEA from inspecting those sites.
Now here’s another key point: IAEA officials say they wouldn’t even ask for access because they knew Iran would say no and it would give the Trump administration an "excuse" to walk away from the deal.
And former President Trump did correctly walk away from the deal because it was an unverifiable sham.
Now, driven in large measure by domestic political concerns, not national security demands, Joe Biden is preparing to reenter an agreement 45 conservative national security experts, many of whom held senior positions in the nuclear weapons, arms control, nonproliferation and intelligence fields, urged President Trump to abandon.
Nothing has changed since 2017, except Joe Biden’s desperation to avoid the higher fuel prices his feckless foreign policy and improvident domestic energy policies have forced on American consumers. The Senate must recognize the threat a nuclear Iran poses and vote down any renewal of the Obamabomb deal.
For more on the dangers of the Obamabomb deal see our articles, Even UN Says Iran Not Complying With Obama Nuclear Weapons Deal, Conservative National Security Experts Urge President Trump to Withdraw From Obama's Nuclear Deal With Iran, President Trump’s UN Speech vs. Action On Iran And North Korea and If North Korea Has Miniature Nukes, So Does Iran.
World Oil Prices
Obama Iran nuclear deal
Joe Biden foreign policy
gasoline prices
John Kerry
Iran oil shipments
U.S. sanctions on Iran