BAKU, Azerbaijan, Apr.19
By Leman Zeynalova - Trend:
Around 500 kbd of Iranian oil will make its way into the market this year, but now allow for a higher production profile in 2022, Trend reports citing the US JP Morgan Bank.
“With Iran back in the market, we believe Saudi Arabia will continue to prioritize its revenue-maximization strategy in 2021, rather than battle for market share with its geopolitical competitor.
Iran’s oil production and exports have been rising faster than projected despite severe US sanctions and the COVID-19pandemic.A surge in shipments to China resulted in Iran’s average crude and products exports to average 636 kbd in year-to-date through April, up from 570kbd in 4Q20. This trend and the twenty-five-year $400 billion strategic and economic partnership signed between China and Iran in March could reduce the urgency to restore the nuclear deal among key political stakeholders in Tehran, who may gain more power after the June 18 Iranian presidential elections,” reads the latest JP Morgan report.
Following on a first formal meeting on April 7, indirect discussions between the US and Iran over how to bring both sides into compliance with the original 2015 nuclear deal (the Joint Comprehensive Plan of Action, or JCPOA) resumed on April 14, with European officials serving as the main intermediary given Tehran’s rejection of face-to-face talks for now. During the first round of negotiations, the remaining parties to the agreement chaired by the European Union reportedly agreed to form two expert-level groups whose job will be to negotiate the list of sanctions that the US could lift with nuclear obligations that Iran would in turn meet.
For its part, Iran has never formally quit the agreement but has since taken steps to resume its nuclear work that have put it out of compliance with the deal, such as enriching uranium to 20% purity. So far, Iran has insisted that every sanction that has been imposed has to be lifted and that the country needs three to six months to ensure it is benefitting economically before it returns to full compliance with the deal. It is important to remember, that Iran’s experience of sanctions relief following the 2015 JCPOA agreement was disappointing as it failed to deliver the investment and access to the international banking system it promised, an assessment seconded by Robert Malley, Biden’s envoy to Iran. But any such moves will likely raise concerns among US allies and members of the Congress about the Biden administration’s ability to reach a fair agreement with Iran both on its current nuclear program and on future regional security.
---
Follow the author on Twitter: @Lyaman_Zeyn