Iran nuclear deal? Unlikely. So no extra oil soon

The odds of a new nuclear deal with Iran are shrinking every day. The ongoing discussions, repeatedly praised by the participants for having almost reached a solution, are actually hanging by a thin thread.

Even if the negotiations are not closed, Tehran's hope of convincing the United States and its European partners to sign an agreement on the global oil supply deficit appears increasingly unrealistic. The ongoing discussions are failing as the Iranian stance on several key issues remains very rigid and prevents a breakthrough. Since the latest negotiations began more than a year ago, Tehran has been actively engaged in finding new ways to get their hands on nuclear weapons technology. The intransigent new government of President Raisi, fully backed by the Islamic Revolutionary Guards (IRGC), the very powerful paramilitary force in the country, is not at all willing to back down. Furthermore, Iran requires that the sanctions on the IRGC, defined as "Terrorist", be lifted before signing, but this is impossible because President Biden does not have the support of Congress in this regard.

Furthermore, Biden also needs to enlist the support of other powers in the area, in particular the Arab states of the Gulf, such as the United Arab Emirates and Saudi Arabia, but also Egypt and Israel, and this seems very complex. Arabs and Israelis are even openly discussing an anti-Iran military alliance, which could be used as a geopolitical counterweight to any pro-Iranian move by the US or Europe.

During an unprecedented Arab-Israeli meeting in the Negev, Israel, the United Arab Emirates, Bahrain and Morocco discussed possible strategies to counter Iranian influence in the region. The result is unclear, but Israeli and Arab military analysts have hinted at a military alliance. Iranian officials are well aware of the possible failure of the negotiations, so much so that this week one said that " the agreement is in the emergency room ". it could not be otherwise, given that the basis of discussions were, from the beginning, very weak, and were the same that had prompted Trump to reject the JPCOA. To be precise:

• there were no hard limits to the Iranian nuclear program,
• they did not consider the Iranian missile advances,
• they did not include Tehran's influence on the various armed groups in the area, such as Hezbollah, Hamas, Houthi and the Shiite militias in Iraq, all militias engaged in the area against Arab countries, Israel or the West.

This failure will prevent the increase in local oil production, currently below 4 million barrels per day, and its relocation to the west. The markets would have responded with a drop in prices to the agreement, but it seems that this will not happen.

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The article Iran nuclear deal? Unlikely. So no extra oil in the short term 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/accordo-sul-nucleare-iraniano-improbabile-quindi-niente-petrolio-extra-presto/ on Tue, 19 Apr 2022 10:00:45 +0000.