Reviving the Iranian Nuclear Deal: is Russian factor, the latest acid test?

Russian oil production 2021

Having seen eye to eye on many global issues, ranging from the war in Syria to the early stages in the Ukraine-Russia military conflict, especially when it came to the role of the NATO, the relations between the two OPEC+ members may suffer if Russia drags its feet over it, citing its own interests.

In a highly unusual move, some Iranian state-backed media has taken a swipe at what it called, 'foreign interference' against reaching an agreement in reviving the JCPOA, 2015 Iranian nuclear deal.

Iran, however, has not commented on the press report in public, still maintaining its good relations with Russia on diplomatic front.

Iran has been showing an intense interest in reviving the nuclear deal, perhaps being excited by the obvious - the rapidly rising crude oil prices; there has not been a better period for the oil producers, almost in a decade, to make a fortune at current crude oil prices. Iran clearly does not want to miss out on it.

Having failed to bring down the price of crude oil by the collective release of SPRs, Strategic Petroleum Reserves, the US cannot turn a blind eye to the grievances of the ordinary Americans at the pumps.

The predicament is not better in Europe either. This may be the reason that the German chancellor voiced his concern over the energy factor at the weekend, while raising fears over maintaining the social cohesion in his country over rising energy costs.

The US still imports crude oil from Russian and the particular type in question, according to analysts, is not something that can easily be substituted for, although Canada said on Monday it can step in; analysts wonder why the two giant neighbours could not reach a deal on the specific fuel - up until now, a serious political situation arose.

Russia's is the third largest crude oil producer, after the US and Saudi Arabia; almost half of it ends up in Europe and the rest goes to Asia.

The OPEC+, meanwhile, is under immense pressure to increase the production. Its Secretary General, in response to the growing demand, said today that the oil producers need investment in order to meet the urgent demand; in short, rising production is not going to materialise in a matter of weeks, let alone days. 
 
As the West scramble for alternatives in order to keep the rising energy costs at bay, even Venezuela has been on their radar for a potential source in the hour of need - according to some media reports. Having been under the US-led sanctions for years, how much the Latin American country can contribute remains to be seen.

In this context, the West may not rush to ban the crude oil imports from Russia on a whim: on one hand, it may push price of crude oil above $150 a barrel in a matter of days; on the other hand, when the prospects of major European economies grinding to a halt becomes a reality, cracks may run across the uneasy alliances that got united against Russia - as the last resort.



 


 

 

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