The oil market was up and then down because of off-again, on-again, Iranian, and Russian sanctions. Oil prices, which were partly weak due to the crypto craze, had a meltdown yesterday. Add to it covid concerns and reports out of the Iranian nuclear talks that a deal was in reach.

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Oil prices sold hard. Yet late in the day the selling was tempered by reports of comments from diplomats from Britain, France, and Germany (a group known as the E3) that offered a note of caution, saying that while there was some tangible progress with the contours of a final deal emerging, success was not guaranteed. Iranian President Rouhani claimed that the main agreement has already been reached in Vienna. “They have agreed to lift all major sanctions,” he says, including oil sanctions, petrochemical, shipping, insurance, central bank, and other banks. That report caused a sharp drop but at this time they are recovering.

India is already licking their chops planning on resuming its purchases of that good old cheap Iranian oil. Reuters reports that Indian refiners and at least one European refiner are re-evaluating their crude purchases to make room for Iranian oil in the second half of this year, anticipating that U.S. sanctions will be lifted, company officials and trading sources said. Former U.S. President Trump abandoned the 2015 Iran nuclear deal and reimposed sanctions on Tehran in late 2018. Until then, Europe and Turkey had consumed close to 500,000 barrels per day (bpd) of Iranian oil. India, Iran's biggest client after China, was buying as much as 480,000 bpd in the fiscal year beginning April 2018.

At least one European refiner has held in-depth discussions with Iran's state oil firm NIOC on resuming purchases and Indian refiners say they plan to reduce spot purchases to make way for Iranian contract barrels according to Reuters. Take that you U.S. oil producer! 

Natural gas producers lose as the Biden administration opens up the door to the Russian pipeline. U.S. Secretary of State Antony John Blinken announced that the U.S. has waived sanctions on Nord Stream 2 AG and company CEO, which will allow the pipeline from Russia to Germany to be built while imposing sanctions on four Russian vessels and four Russian organizations that are assisting in the construction of the Nord Stream 2 pipeline, which will not stop the pipeline completion. This will make Germany and Europe more dependent on Russia for energy, which has proven that they will use energy as a political weapon. This will also compete with U.S. natural gas producers that will now be put at a major disadvantage. This is a big win for Russian President Vladimir Putin.  

This break-in oil will depend on sanctions and OPEC Plus and their reaction. Stay tuned!