FP: Will Iran enter the oil market with a bang — or more of a whimper?
U.S. oil companies are unlikely to rush into Iran anytime soon, even if Tehran secures a deal with global powers this summer regarding its nuclear program, according to analysts.
Iran’s ability to export crude oil has been severely curtailed due to tough sanctions by global powers, but a deal is within reach on its nuclear enrichment program with the so-called P5+1 nations, namely the United States, China, Russia, France and the United Kingdom and Germany. On Tuesday, negotiators pushed a deal date to July 7 to iron out differences.
“It’s crunch time,” says Richard Nephew, who served as the lead sanctions expert for the U.S. team negotiating with Iran “My sense is that we are still looking at a deal in the summer.”
But the lifting of international sanctions would likely still preclude U.S. companies from entering Iran.
“I don’t actually think that this deal will change the U.S. economic interactions with Iran,” Nephew, a former principal deputy coordinator for sanctions policy at the U.S. State Department and director for Iran at the National Security Council, said in an interview.
“I don’t think U.S. bilateral embargo is on the table… A lot of people in Congress would be very upset if it were.”
Non-American companies may conduct business with Iran if a deal is struck, provided they don’t use U.S. technology or personnel, Nephew said.
Officials from oil majors, including reportedly Royal Dutch Shell Plc and Italy’s Eni SpA, have visited Tehran in recent weeks to discuss opportunities. But Citibank believes European energy companies will be reluctant to fully re-engage until there is substantial clarity about the durability of waivers on U.S. Congressional measures.
If President Barack Obama were to substantially give ground on what was agreed in April in order to secure a final settlement, enough Democrats could desert the White House to block the deal in the U.S., notes RBC Capital.
