US – Iran Talks Stall
Negotiations for the nuclear deal took a pause on Sunday after hardline judge Ebrahim Raisi won Iran’s presidential election. Two diplomats said they expected a break to around 10 days.
The U.S. and Iran began in mid-June their sixth round of indirect talks on reviving a 2015 nuclear deal that former U.S. President Donald Trump pulled out of in 2018. Trump reimposed sanctions on Iran’s energy sector, leading refiners in many countries to shun Iranian crude and forcing Tehran to pump well below capacity.
Iran Stores More Oil on Tankers as It Counts Days to Enter Markets
While the pause in U.S.-Iran negotiations may be behind Monday’s upward price spike in oil, there still are some traders who fear a deal between the two countries could bring more oil into the market than previous thought.
According to Reuters, Iran could quickly export millions of barrels of oil it is holding in storage if it reaches a deal with the United States on its nuclear program and has been moving oil into place to prepare for an eventual restart, four traders and industrial sources said.
Traders are also saying that a deal could lead to Iran exporting an extra 1 million barrels per day, or 1% of global supply, for more than six months from its storage facilities.
OPEC Told to Expect Limited US Oil Output Growth for Now
Reuters is reporting that OPEC officials heard from industry experts that U.S. oil output growth will likely remain limited in 2021 despite rising prices, OPEC sources said, giving it more power to manage the market in the short-term before a potentially strong rise in shale output in 2022.