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.
The talks about the United States and Iran returning to the Joint Comprehensive Plan of Action (JCPOA)—as the Iranian nuclear deal is officially known—have entered the final crucial stage.
In recent days, reports have intensified that the indirect talks between the United States and Iran are in their final stage and are said to be “about to cross the finish line,” according to a tweet from Russia’s envoy Mikhail Ulyanov on Tuesday.
“At the final stage of the #ViennaTalks intensive consultations in various formats are underway,” Ulyanov said a few hours later.
However, some key issues still need to be resolved, and talks are now at a “critical” stage, Iran’s Foreign Minister Hossein Amir-Abdollahian said on Wednesday, as quoted by AFP.
“We hope that some sensitive and important issues remaining in the negotiations will be resolved in the coming days with realism from the Western side,” the minister said at a news conference in Tehran.
“We wonder whether the Western side can adopt a realistic approach to go through the remaining points of the talks,” Reuters quoted Amir-Abdollahian as saying at the same press event.
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.
By Charles Kennedy for Oilprice.com
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The only deal acceptable to Iran is one on its own terms meaning a lifting of all US sanctions first and no new limitations on its nuclear and ballistic missile development programmes. This is something the United States egged by Israel can’t accept.
If in the very unthinkable event a deal has been reached, the maximum additional oil Iran could bring to the global oil market won’t exceed 650,000 barrels a day (b/d) being the difference between Iran’s pre-sanctions and post-sanctions crude oil exports. This is a mere drop in the ocean in the current very bullish oil market.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London