Energy Report: Nuclear Talks On Hold

Iranian nuclear talks are being put on hold as Iran has a new president-elect hardliner, Ebrahim Raisi. Raisi is a person that the U.S. sanctioned because of his involvement in the mass execution of thousands of political prisoners in 1988. He gave a speech this morning and called on the U.S. to return to the nuclear deal in full compliance. He is also saying that the European Union has failed to meet its obligation under the JCPOA deal. The JCPOA talks broke down over the weekend yet some diplomats said that there was some progress made, for example on what sanctions could potentially be removed if there was a deal. The truth is the election of Raisi makes it almost impossible to get a deal done.

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For example, Ebrahim Raisi said that "Regional issues or the issue of missiles are not up for discussion. The issue which was negotiated agreed, and signed - they did not deliver on. How do they want to draw up and enter agreements on new issues? He also says he will refuse to meet Biden. Raisi represents what's worst about the Iranian regime. His ascent to power is a sign that Iran is moving further away from international norms and instead is going to adopt a more aggressive approach in global affairs. This is bad news for the stability of the Middle East and its bad news for people who care about Israel. It also shows why the Iranian nuclear deal was a failure in the first place.

Yet Iran somehow believes that the deal still is going to get done. Reuters is reporting that Iran could quickly export millions of barrels of oil it is holding in storage if a deal is done and sanctions are lifted on their oil exports. Reuters suggests that if sanctions are lifted Iran could export an extra 1,000,000 barrels of oil a day or 1% of the global supply for months. Reuter says that they have nearly 60 million barrels of crude oil in inventory, 30 to 35 million of that has been built up during the last two years.

Still, the way the global demand is growing right now for well and other energy products, perhaps if Iran's oil does return to the market, it will be sorely needed. There are more concerns about global spare production capacity and because of the movement away from traditional fossil fuels, we have seen a historic drop in investment that is going to leave the world undersupplied.

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