If oil is not at 120 dollars it is thanks to Iran. But China …

News from Ukraine and the tightening of the confrontation with Russia should push oil prices even higher. Instead we are stable on a high value, over 95, but still in the context of the quotations of the last few days, despite the talk of sanctions one day and one as well.

This is for two reasons:

• because it is not certain that the crisis will continue further, Putin could be content with confirming the status quo in the Donbass;
• because the Iranian crisis seems to be heading towards a solution.

Indeed, while the world was focused on the Russian question, something moved in the negotiations for the disarmament agreement , or controlled nuclear development, in Iran.

The progress is confirmed by diplomatic sources and an agreement is now looming that should satisfy both the western parties and Tehran, even if there are still no official documents leaked. There are very strong indirect confirmations:

• first of all diplomatic sources speak of a possible, imminent, exchange of prisoners. Iranians detain a dozen American citizens with dual citizenship, on charges of espionage or the like. Tehran would like to exchange them for Iranian citizens detained in the US;
• Israel has started complaining that the new version of the JPCOA, the nuclear disarmament agreement, would be less strong than that of 2015 and would therefore lead to a destabilization of the Middle East. However, this also means that the agreement is close and that the Iranian services have managed to obtain direct information on the current situation.

The consequences of the conclusion of an agreement would be considerable in general oil production, because it would completely unblock Iranian output, but this is bound, in large part, by the 25-year agreement with China, where Iran guarantees a important share of its production, at discounted prices, in Beijing in exchange for infrastructure investments. This implies that China is in an ideal energy situation, with supplies guaranteed by Russia, Iran, Venezuela, etc, mostly due to a bad Western foreign policy. At the same time, this agreement with Beijing becomes not very convenient for Tehran, if it can also sell to the West at full price. It will be interesting to see how the situation of international relations in the Islamic republic will evolve

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The article If oil is not at 120 dollars it is thanks to Iran. But China… comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/se-il-petrolio-non-e-a-120-dollari-e-grazie-alliran-pero-la-cina/ on Tue, 22 Feb 2022 10:32:36 +0000.