In Iran’s push for a nuclear deal, it’s had few better allies than Moscow. But if an agreement is reached this week, President Vladimir Putin’s regime will have at least one reason to reflect on its support. Russia, which vies with Saudi Arabia and the U.S. to be the world’s largest oil producer, has the most to lose when Iran returns to the global energy market, according to a dozen analysts and executives at oil companies, banks and trading houses interviewed by Bloomberg.
US Secretary of State John Kerry tempered expectations that a nuclear deal with Iran is imminent as foreign ministers from world powers rejoined a record ninth straight day of negotiations. While progress continues to be made at the talks, “we are not yet where we need to be on several of the most difficult issues,” Kerry told reporters on Sunday at Vienna’s Palais Coburg, where he’d been meeting for much of the day with Iranian Foreign Minister Mohammad Javad Zarif. An agreement will allow energy-rich Iran back into global oil and natural-gas markets as sanctions are lifted. The US, whose allies in the region are wary of Iran’s influence, says it will only sign a deal that restricts the Islamic Republic’s ability to make nuclear weapons. Iran says its program is entirely peaceful.
A nuclear deal with Iran looks imminent after a logjam over monitoring was broken and with foreign ministers set to rejoin U.S. Secretary of State John Kerry in a record ninth-straight day of talks later on Sunday. Kerry began morning meetings at Vienna’s Palais Coburg with Iranian Foreign Minister Mohammad Javad Zarif, a U.S. administration official said. The impending agreement could be announced as early as Monday, according to two Western officials who asked not to be named in line with rules. “The extension of negotiations is not a desired alternative for any of the parties,” Zarif’s deputy, Abbas Araghchi, said Saturday on state television. “All parties involved are determined to come to a conclusive end.”
The head of the United Nations atomic agency will travel to Iran Thursday to meet the nation’s president and top security official, Iranian media reported, as talks with world powers tackle remaining hurdles to a nuclear deal. Yukiya Amano, director general of the International Atomic Energy Agency, will meet Iranian President Hassan Rouhani in Tehran, state-run IRNA news agency reported, citing diplomats it didn’t name. He’ll also hold talks with the secretary of Iran’s Supreme National Security Council, Ali Shamkhani, a key official with military oversight.
As Iran nears a deal to ease oil sanctions after almost two years of talks, selling more crude remains a long way off. The nation’s goal of increasing exports 50 percent as soon as restrictions are lifted won’t be fulfilled, say Goldman Sachs Group Inc., Bank of America Corp. and Societe Generale SA. That would require an extra 500,000 barrels of daily output, which the banks say will take six to 12 months as OPEC’s fourth- biggest producer complies with terms of a deal and revives aging wells. The impact on prices will be limited, the banks predict. “They’ve got to meet the requirements of any agreement, and that’s going to take time,” Jeff Currie, head of commodities research at Goldman Sachs, said by e-mail from New York on Monday. “When you shut these fields in to that significant of a degree, your ability to bring back production to previous levels will be limited because you’ve done damage to the fields that will require significant investment.”
Diplomats in Vienna are close to clinching a historic deal to curb Iran’s nuclear program, according to European Union foreign policy chief Federica Mogherini. “We are near to close the deal, it is a good deal,” Mogherini told reporters late Sunday after meetings with U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif, who was heading to Tehran for consultations with his leadership before returning to Vienna.
For every investor who sees opportunity in a post-sanctions Iran, there are others who see the same old legal morass. The Islamic Republic is banking on a nuclear accord with world powers to unleash a flood of foreign cash into an economy crippled by decades of sanctions. Companies including Royal Dutch Shell Plc, BP Plc and Total SA say they’re willing to invest in the OPEC member.
Royal Dutch Shell Plc executives have visited Tehran to discuss possible partnerships, the latest sign that the largest oil companies are serious about returning to Iran once a deal on the country’s nuclear program is done. The meeting with Iranian officials covered its outstanding debt to National Iranian Oil Co. and possible areas of business cooperation, the company said in an e-mailed statement Wednesday. Shell owed $2.16 billion as of the end of 2014 for oil it wasn’t able to pay Iran for because of sanctions, according to its annual report.
Iran needs $100 billion to rebuild its gas industry and has met with European energy giants as an end to decades of international sanctions looms, according to the state-run company in charge of discussions. “We welcome and appreciate investment by companies; we welcome new technology,” Azizollah Ramazani, international affairs director at National Iranian Gas Co., said in an interview in Paris. “During the last 18 months we have had many discussions with foreign companies.” While commodity markets fixate on a return of Iranian oil, the importance of gas in the longer term was underlined Wednesday as BP Plc data showed the Islamic Republic held its position as the nation with the largest proven reserves of the fuel after snatching the crown from Russia in 2011.
About the only surprise to come from OPEC’s decision on June 5 to leave oil output unchanged was that everyone got along. “I have been in OPEC for some many years, and it is the first time I had seen this,” OPEC Secretary-General Abdalla El-Badri said after the meeting. “Very, very positive.”
Iran, seeking billions of dollars to revitalize its ailing oil industry, plans to offer significantly better commercial terms to companies prepared to invest than offered during the last market opening nearly two decades ago. Foreign oil executives who have reviewed partial drafts of the new terms, called the Iranian Petroleum Contract, said they’re more generous than the types of deals used in the 1990s and 2000s. Unlike those contracts, which merely paid a set fee for the delivery of a project, the new agreements could give investors some share of a field’s production and allow companies to book more reserves on their balance sheet.
The UN’s atomic agency will be reporting a standstill in attempts to probe allegations that Iran is working on nuclear arms, in an assessment later today, diplomats have said. The International Atomic Energy Agency reports regularly on Iran’s nuclear programme, but the upcoming summary is particularly important because its investigation figures in an emerging deal meant to restrict Tehran’s nuclear activities in exchange for sanctions relief.
Iran is set to abolish motorists' allowance for heavily subsidised fuel and set a price, according to the country's deputy oil minister. The move is being made as the government makes careful steps to cut back on costly handouts. According to reports, Abbas Kazemi said petrol would now be sold at a single rate of $0.35 per litre.
ExxonMobil has denied reports it has been lobbying the US Government on Iran sanctions. The company issued a statement in which its vice president of Public and Government Affairs said the reports regarding the matter were "inaccurate".
With tensions over its roles in Yemen, Iraq and Syria already high, Iran is flexing its military muscle in the Persian Gulf. For the third time in as many weeks, Islamic Revolutionary Guard Corps patrol boats have fired at or aggressively tailed commercial vessels in the Gulf and the Strait of Hormuz, the No. 1 global choke point for oil transit. “You have to go back to 1988, toward the end of the Iran-Iraq war, to see such actions,” said Alex Vatanka, a senior fellow at the Middle East Institute in Washington.
A British man is on board a cargo ship seized by Iranian authorities. He is one of 24 crew members on the Maersk Tigris, which was in international waters crossing the Strait of Hormuz en route from Jeddah in Saudi Arabia to Jebel Ali in the UAE when it was approached and seized by Iranian patrol boats. A spokesman for Denmark-based Maersk said they understand the “crew is safe and under the circumstances in good spirits”. A statement added: “We are continuing our efforts to obtain more information about the Iranian authorities’ seizure - in international waters - of Maersk Tigris. We are not able at this point to establish or confirm the reason behind the seizure.
As Russian President Vladimir Putin has shown in Crimea and eastern Ukraine, he’s willing to take an economic hit to expand his political influence. He’s taking the same approach with Iran. Lifting sanctions and allowing Iranian oil onto global markets would threaten to deepen the plunge in crude prices, curbing revenue from Russia’s biggest export. The cost: about $27 billion, based on estimates from the central bank in Moscow. “The strategic benefits are much more important for Russia,” said Nikolay Kozhanov, an expert at the Royal Institute of International Affairs in London and a nonresident fellow at the Carnegie Moscow Center. “Incorporating Iran into pro-Moscow organizations, Russia is hoping to secure its share in this market or divide zones of influence.”
Oil held gains after a fourth weekly increase as skepticism among US lawmakers over a nuclear deal with Iran signaled a recovery in the OPEC producer’s crude exports may be delayed. Futures were little changed in New York after rising 5.1 percent last week. President Barack Obama is dispatching three cabinet members to brief lawmakers as a Senate committee prepares to take up a bill that will give Congress 60 days to review any final agreement with Iran.
Iran and world powers took their biggest step toward ending a decade-old nuclear standoff, saying they agreed on the main outlines of an accord after more than a week of grueling talks. The deal announced in Lausanne, Switzerland on Thursday doesn’t commit either side to immediate action, and leaves three more months for diplomats to fill in details. But by outlining areas of consensus, from a timetable for lifting sanctions to the repurposing of Iranian nuclear facilities, it brings the Islamic Republic closer than at any time since the 1979 revolution to international normalcy. President Barack Obama called it an “historic understanding,” and the International Atomic Energy Agency said it was ready to verify Iran’s actions. There were early signs, though, that the next steps won’t be easy.
Iran and world powers extended talks aimed at ending the 12-year standoff over the Islamic Republic’s nuclear program into an eighth day with the US indicating progress toward an agreement. Diplomats negotiated all night in Lausanne, Switzerland and will reconvene at about 9:00 a.m. local time, US spokeswoman Marie Harf said. The US State Department said late Wednesday that enough progress had been made in meetings between Secretary of State John Kerry and his Iranian counterpart Mohammad Javad Zarif to warrant continuing talks.
Iran and world powers are weighing compromises in order to overcome a deadlock in nuclear talks with little more than 12 hours to reach an agreement. “We’re in a bit of a crisis with the talks; perhaps we have a bit of a new approach, we will see,” Frank-Walter Steinmeier told reporters on Tuesday. Russia’s Foreign Minister Sergei Lavrov said in Moscow that there’s still a good chance the sides can overcome their differences before the deadline. An understanding can be reached “as long as none of the participants at the talks raise their stakes at the last moment,” Lavrov said at a press conference prior to returning to Lausanne, Switzerland, where the negotiations are taking place. The effort to end a 12-year standoff has negotiators still divided over the pace of easing sanctions on Iran, and the limits to be imposed on its research to ensure it can’t obtain nuclear weapons.
Outside the boardroom of BP Plc’s headquarters on London’s swanky St. James’s Square, a display case houses the geological data from Masjid-i-Solaiman, Iran’s first oil well. The discovery of crude in 1908 laid the foundations for the company that would become British Petroleum and opened one of the richest opportunities that western oil companies have ever enjoyed in the turbulent Middle East. Since then, the industry’s history in Iran is intertwined with CIA-backed coups, colonial exploitation and the anti-western resentment surrounding the 1979 Islamic Revolution.
Lifting oil sanctions on Iran could hit global markets long before the nation starts pumping more crude. That’s because the OPEC member has been stockpiling oil onshore and in supertankers in the Persian Gulf, according to data compiled. While estimates of the hoard by shipbrokers and government officials vary from as little as 7 million barrels to as much as 35 million, Barclays Plc and Societe Generale SA predict this crude would be first to be sold abroad if there’s an agreement on Iran’s nuclear program.
Asian oil buyers taking their pick of supply from Iraq to Mexico amid a global glut are preparing for the pool of potential bargains to expand if Iran boosts exports. As world leaders seek an accord on Iran’s nuclear program, at least six Asian refiners including India’s Mangalore Refinery and Petrochemicals Ltd. and Japan’s Cosmo Oil Co. are anticipating more supply from the Middle East producer if sanctions against the nation are lifted. While global producers seek to defend market share as oil prices trade near a six-year low, buyers in Asia are diversifying their crude sources by shipping cargoes from as far as Colombia.
Iran says it could add a million barrels to daily oil production shortly after a deal to lift sanctions is reached, reclaiming the position of OPEC’s second-largest supplier. While the timing of such a move would be at least months away because the sanctions would be rolled back slowly, industry observers largely agree that the capacity is there. Yet going further than that and adding a second million barrels -- as the government has said it plans to do -- will prove a much bigger challenge.