Prospects of reviving the Iranian nuclear deal fades away; OPEC+ is back under spotlight

 

The prospects of a success in reviving the JCPOA, 2015 Iranian nuclear deal, is slowly turning into a desert mirage, keeping a grand audience of investors, traders, analysts and of course and of course, men and women in the street in a state of confusion; it’s not a spectacle to watch that in turn keep you in awe.

With the seizure of the domains of certain Iranian news websites by the US government, the possibility of reaching a deal seems much more unlikely than it was a few weeks before; when the newly-elected Iranian president says that negotiations for the sake of negotiations do not make any sense, it vaguely reflects the mood of the incoming administration in early August.

Although the outgoing administration of President Hassan Rouhani wants to leave a happy legacy with the success of a deal, judging by the events since the election, it may be easier said than done; at some point in the past few weeks, Mr Rouhani was so optimistic about a deal being struck that it sent crude oil prices almost nosediving!

Of course, oil price has since recovered and is on the rise again; it is clear that the price of oil has been dancing to the drum beats of the talks, or rather the communiques that use to come after each round of talks, in Vienna, Austria, involving the signatories to the nuclear deal.

It’s not the eternal animosity between the US and Iran that erects roadblock along the way to the success of reaching a new deal. The regional players want guarantee that the sole purpose of Iranian nuclear ambitions is for civilian purposes.

Although Iran and its main regional rival on religious grounds, Saudi Arabia, tried to mend their strained relationship, the newly elected president does not seem to be in a hurry to warming up to it; the Saudis, meanwhile, say the restoring ties depends on the realities on the ground.

In his first policy address, referring to Yemen, Ebrahim Raisi, the newly elected Iranian president, said that it must be left to Yemenis to decide their own affairs, not the foreigners, while taking a swipe at the Arab coalition that regularly bombard Yemen in response to drone attacks on Saudi targets; the attacks show no sign of abating; on the contrary, they keep increasing – and with more sophistication.

Against this backdrop, the price of crude oil briefly dipped on Monday for inexplicable reasons. Analysts attribute it to a possible increase in output by the OPEC+ to control the rise of oil price. There is no doubt that the group must be under tremendous pressure to deal with the increase in price that could damage the fragile global economic growth.

With the relevance of Iranian factor – reviving the nuclear deal – paling into insignificance, all eyes will be back on the next OPEC+ meeting on July 1. No wonder oil markets are edgy about the prospect of an increase in output by the OPEC+ - under international pressure.