Oil Price: the CEO of Baker Hughes expresses cautious optimism while Iranians wait for the light end of the tunnel

 

2015 Iranian nuclear deal

A member of a powerful parliament committee in Iran, a cleric, according to the Iranian media, has said whatever agreed upon in Vienna, must be approved by the Iranian parliament – in the end.   

It echoes the concerns of the moderates in the Iranian administration about the delicate balance that the negotiation team has to strike while participating in the ongoing talks in the Austrian capital.

Since the Iranian presidential elections are scheduled for June, the negotiating team, handpicked by the administration of President Hassan Rouhani, has not got much time left on their hands.

The views expressed by the influential cleric on the eve of the next round of talks between Iran and the signatories to the JCPOA, 2015 Iran nuclear deal, is certainly going cast a shadow over the final outcome. That, however, does not mean a final deal cannot be struck, as both sides want a clear path ahead devoid of confrontation in cold-war calibre.

Iranian oil sector has been hoping for the light end of the tunnel for months, as they have been increasing the production of the crude oil; their potential buyers, meanwhile, are waiting in the wings to be part of the process. In this context, Iran cannot afford to let the ongoing discussions head towards a failure.

On political front, meanwhile, the talks between Iran and its Sunni rivals in the region in order to reset ties do not seem to be making the progress well; the initial enthusiasm has clearly fizzled out.

Saudi Arabia and the UAE, for instance, still harbour reservations about Iranian nuclear activities; there is no palpable enthusiasm in Riyadh or Abu Dhabi over the talks on the JCPOA in Vienna.

The process of the reviving ties between Saudi Arabia and Iran hardly gets a boost, when the latter has to thwart attacks by the Houthi rebels on its infrastructure – almost on daily basis; even today, an attack at Red Sea was foiled by the Saudi-led Arab coalition.

In light of these unpredictable political developments, analysts of the crude oil markets watch both the talks in Vienna and the evolving regional volatility before making any long-term predications.

This may be one of the reasons for the head of Baker Hughes to be cautiously optimistic about the prospect of oil price in the next few months, despite encouraging economic news, in an interview with an Arabian newspaper at the weekend.

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