A surprise breakthrough in Iran-nuclear deal talks could be at hand.
After five days of indirect negotiations in Vienna, there's a 'final' draft text that will be taken back to national capitals. Politico has much of the details and highlights some of the snags.
This has been brewing for some time but the market has been skeptical because of repeated failures previously. Passing a deal now is tough politically for Iran leaders and the US can only conceed so much.
“There is a real chance for an agreement but there are still a number of uncertainties as always,” one senior Western official told Politico.
For the oil market, a big question is how much oil this would add. Iran officially has 1 million barrels per day of extra export capacity but there's a widespread belief they're using ghost ships to export a portion of this -- perhaps all of it -- already. The US eased off aggressive enforcement of sanctions as oil prices rose and China has been the buyer.
A deal would help to explain some of the recent weakness in crude. Oil is trading down 47-cents to $88.54 today, which is near the lowest since the Ukraine war.
For its part, analysts at Goldman Sachs reiterated a bullish view today while cutting its supply forecast by 200k bpd for this year and next. They see demand growth of 1.2 mbpd in H2 and 2.0 mbpd in 2023. They now see brent at $10-125 in Q4 compared to $130-140 previously. Their $125 forecast for 2023 remains.
