Update (1245ET): Well that didn't last long. After oil prices plunged on Iran nuclear deal optimism, they have surged back higher again now after Russian Envoy Ulyanov clarified his earlier remarks, noting that it's "too early for a breakthrough" in the nuclear talks, noting that "unresolved issues remain."
Oil prices just plunged following headlines from Vienna that Mikhail Ulyanov, Russia's envoy to JCPOA talks, says "important news is likely to be released by tomorrow" and "the negotiations have made major progress", in a statement to BBC Persian correspondent Kasra Naji.
WTI is back near a $63 handle...
And Brent is tumbling after breaching $70 earlier in the day...
The drop in price is likely due to any deal with Iran will 1) remove some mid-East tension premium (though Israel and Palestine are spoiling that, however, indirectly through Iran), and 2) the potential opening up of Iranian oil exports (legally, not illegally to China).
More Top Reads From Oilprice.com:
- Russia Is Making A Mad Dash To Outrun Peak Oil Demand
- Related Video: Iraq Eyes Exxon Stake and New OPEC Status
- Is This One Of The Best Ways To Play The Electric Vehicle Boom?
Iran will neither negotiate directly with the United States before the sanctions are lifted first nor will it be ready to renegotiate the nuclear deal which will certainly try to impose limitations on its nuclear and ballistic missile development programmes. From the United States’ point of view, renegotiating the deal means Iran’s relinquishing its nuclear and ballistic missile development programmes which Iran will never do and therein lies the rub.
It is very probable that supporters of the Islamic Revolutionary Guard Corps (IRGC) are going to have a landslide in the 18th of June presidential elections. The IRGC and its allies will do their utmost to derail any negotiations with the United States as a retaliation for the assassination of their leader Qasim Sulimani or get a deal on their own terms.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London