How can non-certification of nuke deal affect Iran’s oil projects?
Baku, Azerbaijan, Jan. 10
By Leman Zeynalova - Trend:
Non-certification of Iranian nuclear deal by US President Donald Trump could put Iran’s oil and gas projects at risk, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY and SVP MEA-Risk, told Trend.
It is not clear what will the US President Donald Trump's decision be January 12, when he must decide again whether to certify the Islamic Republic's compliance with the JCPOA (Joint Comprehensive Plan of Action, aka nuclear deal), as he is required to do every three months.
The expert believes that non-certification will partly block Iran's options for expansion and production of oil and gas, as it will put sanctions on other entities dealing with Iran.
“This will increase volatility in the market, which is currently almost stable. Increasing pressure directly or indirectly will have the oil market move to higher prices, as outcome of all could constrain Iranian oil production,” noted Widdershoven.
The expert pointed out that a non-certification by Trump will for sure put European upstream-downstream oil services in Iran at risk.
“Major projects can and will become very unsure. At the same time, Iran will not be able to access more European banks and financial support. Without access to financial support, projects and operations are totally at risk. Europeans will follow US moves, as already seen by Germany that has put several Iranian banks under sanctions,” said Widdershoven.
Another main issue, according to the expert, could be related to the coordination between the US and Arab countries. "If the latter [Arab countries] follow suit with US moves, European operators will have to follow if they don’t want to threaten their operations in Arab countries."
Still, the expert believes that the overall impact could be slightly lower than expected before, as other OPEC countries and the US will be more than able to supply additional volumes to counter negative impact of the issues related to Iran.
In October 2017, Trump declined to certify Iran's compliance with the nuclear deal, saying sanctions relief was disproportionate to Iran's concessions, adding the agreement goes against US interests. However, he waived the sanctions for another three months and left the decision on staying in or quitting the deal for later, while urging Congress to change the US law concerning the certification.
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