Crude oil prices, after the historic sub-zero plunge in mid-2020, have been steadily recovering over the past 10 months.
The accord, formally known as Joint Comprehensive Plan of Action , came into effect in January 2016.
After the sanctions returned into full effect, Iran was unable to sell its crude in most of the developed and developing economies except for venturing into the grey market.
number of experts agree that once the nuclear deal is revived, the crude market will face brief volatility, with the rates swinging downward for a short period.
“The long term impact may not be much as uncertainty relating to US-Iran relations is likely to persist even if US sanctions are lifted.
“In our view, it actually starts that bullish repricing,” he told CNBC.
Although Tehran’s per-day production capacity would be restricted, the oil stored in its inventory can briefly halt the current price rally if the OPEC+ agrees to its expedited release in the market.
Moreover, sanctions have made it difficult for the Islamic Republic to obtain sophisticated equipment protected by US patents,” Dr Sujata Ashwarya, Associate Professor, Centre for West Asian Studies, Jamia Millia Islamia University, told Moneycontrol.
“As a result, it will most likely take months, if not years, for Tehran to return to exports of 2 million barrels per day in 2016 and 2.8 million bpd before sanctions in 2018.
Crude prices have rallied by nearly 34 percent this year despite the risk of virus mutants derailing the fragile recovery in demand.
The cartel of oil-producing nations is unlikely to relent from its prudent approach.
“In the last few years, Iran has been given special treatment as its supply has been impacted severely by US sanctions.
Raisi, serving as the chief of Iran’s judiciary till his election as the head of the Iranian civil government, was already under US sanctions for his alleged role in extrajudicial executions.
Any further delay may not have much impact on prices and market focus may shift to other factors,” he said.
Before the talks gained pace in Vienna, Iran began increasing its per-day production – owing to the increased demand for its crude from Beijing.
“However, I believe that the China-Iran 25-year cooperation agreement is more for show than substance and likely to strengthen Iran’s bargaining position in the nuclear talks.