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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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OPEC+ Wants Iran To Join Supply Deal If Sanctions Are Lifted

  • It is looking increasingly likely that a new nuclear deal with Iran will be reached and sanctions on its oil industry will be lifted.
  • If and when U.S. sanctions on Iran are lifted, sources from within OPEC+ would eventually expect Iran to join the production agreement.
  • Iran would likely want to restore production to near pre-sanctions levels before joining any such agreement.

If the Iran nuclear talks are successful and the U.S. removes sanctions on Iranian oil exports, the OPEC+ group would look to have the Islamic Republic ultimately join the production supply deal, sources at OPEC+ told Reuters.

A potential agreement about the United States and Iran returning to the so-called nuclear deal looks close, according to an OPEC+ source.

“It is very likely OPEC will adjust Iran into the deal, as there is no other option,” the source told Reuters.

Over the past few days, there have been hints from diplomats that a deal on reviving the nuclear agreement is indeed close, which pushed oil prices lower.

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Iran’s main negotiator, Ali Bagheri Kani, tweeted late on Wednesday:

“After weeks of intensive talks, we are closer than ever to an agreement; nothing is agreed until everything is agreed, though. Our negotiating partners need to be realistic, avoid intransigence and heed lessons of past 4yrs. Time for their serious decisions.”

In case a deal is reached—and the U.S. has said that the window of reaching an agreement is closing fast—Iran could return some 1.3 million barrels per day (bpd) to the market within several months after the U.S. lifts sanctions on its oil exports.

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According to diplomats who spoke to Reuters, a draft of an agreement being discussed would put the main sanction-lifting stage, including oil exports, at a later stage, while releasing Western prisoners held in Iran and unfreezing Iranian funds would come first.

In the event of an agreement, OPEC+ would look to include Iran—currently exempted from all OPEC+ pact quotas—in the deal, Reuters’ source says.

Iran, for its part, will likely seek first to restore its oil production and exports, but it will also likely agree to a quota after talks with OPEC+, a source with knowledge of Iran’s thinking told Reuters.

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on February 18 2022 said:
    This is neither going to happen nor will it be necessary since a lifting of US sanctions against Iran isn’t going to see the light of day soon or ever. The reason is that the positions of the United States and Iran are reconcilable.

    The only nuclear deal that Iran will accept is one on its own terms meaning a lifting of US sanctions first with no limitations on its nuclear and ballistic missile development programmes. This the United States egged by Israel can’t accept and therein lies the rub.

    If in the very unthinkable event a nuclear deal was reached and sanctions were lifted, the maximum additional crude Iran could bring to the global oil market won’t exceed 650,000 barrels a day (b/d) being the difference between pre-sanctions and post-sanctions Iranian crude oil exports. This is a drop in the ocean for a global oil market in its most bullish state since 2014 and which has already entered a super-cycle phase that could last ten years and take Brent crude to $120 a barrel in the very next few years.

    Iran can afford to drag its feet on a new deal until all its demands have been accepted sensing that the United States is in a real hurry to get a deal so as to concentrate all its energies on China and also on the Ukraine crisis.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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