Overturn in the price of oil. Brent futures have gone in a matter of hours from touching 120 dollars per barrel to falling to the 110 dollar zone after it was revealed that Iran’s return to the oil market could be imminent. Iran has been unable to export its crude oil since 2018 after the sanctions imposed by the US (under Donald Trump’s mandate) for breaching the nuclear agreement. Now, these sanctions would be about to be lifted.
The UN nuclear watchdog, the IAEA, has confirmed that its director general, Rafael Grossi, will meet with senior Iranian officials in Tehran on March 5. Some sources assure that the agreement is already signed and only the handshake would remain which will take place in the coming days. This will provide a respite from an extremely tight oil market.
The Iranian state news agency Irna has revealed that Grossi’s trip “is aimed at resolving some disputes over Iran’s nuclear activities” and issues related to safeguard agreements. Mohammad Eslami of the Atomic Energy Organization of Iran will attend, they assure from Iran.
Among the pending issues, the IAEA and Iran must deal with the enriched uranium inventory that Tehran has accumulated since 2019. Iran denies having a nuclear arsenal.
Grossi’s visit comes as officials say talks in Vienna to revive the 2015 Iran nuclear deal have entered the final stages. Iran this week received a draft text to salvage the deal, which began to unravel in 2018 when then-US President Donald Trump withdrew Washington from the deal.
Reviving the deal would involve the US easing restrictions on Tehran, paving the way for a full return of Iranian oil exports at a time when Venezuelan crude remains under sanctions and appetite for Russian supply is dwindling amid tight sanctions on Moscow over its invasion of Ukraine.
Iran can produce up to 4.5 million barrels per day of crude oil, compared to the 2.5 or 3 that it is currently ‘officially’ producing. Right now, this would be a relief for the markets, but Iranian oil would be insufficient to offset the four million barrels that Russia exports every day.
OECD industry oil inventories plunged by 60 million barrels in December, to be 255 million barrels below the five-year average and at their lowest level in seven years. Global oil reserves at multi-year lows and OPEC+’s shrinking spare capacity have left the market with only a small cushion.
Iranian Oil Minister Javad Owji has assured that Tehran can “reach its oil export capacity cap within 1-2 months after receiving the green light from Vienna,” according to the Iranian oil ministry’s news agency. , Shana.
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