Iranian theme in the oil market: relevant, but not yet dangerous

Iranian theme in the oil market: relevant, but not yet dangerous The dynamics of Iranian oil under the sanctions surprise and unnerves major market participants. The fresh positive in relations between Saudi Arabia and Iran can not only stimulate effective negotiations with the United States on a nuclear deal but also affect prices.Tehran recently opened an embassy in Riyadh. For Saudi Arabia, which dominates OPEC, this fact does not matter much - there is no sign that the split between the Saudis and Tehran has ever interfered with oil policy.OPEC has consistently granted Iran various exemptions from production quotas in recent years. Now, improved relations with a powerful neighbour could make it easier for the country to resume talks with the US.However, the situation with production volumes is still working against the policy of lifting sanctions. Tehran said in early May that its production had reached 3 million bpd, but independent sources such as Platts do not confirm this fact. So far, Iran is pumping about 2.66 million b/d, but the rate of production is gradually accelerating.If Iran can increase production and exports while under strict sanctions, then the process of negotiations with the US may stop altogether. Given how well-developed the illicit oil trade is in Iran, the incentive to abandon nuclear ambitions in order to lift sanctions is no longer a strong motivator for Tehran.So far, representatives of the parties at non-public talks in Oman have discussed only the terms of the release of American prisoners held by Tehran in exchange for Iranian oil and gas revenues frozen in foreign accounts.If the sanctions on Iran are suspended or reduced, then it is worth waiting for a short-term drop in prices for the main benchmarks, because the market is counting on a more open trade in Iranian oil at market prices. So fans of commodity assets need to monitor the situation and be prepared for trouble in the form of a strong bearish signal.Profits to yall!#ForexChief #opec #forexnews #StopLoss #stocks #market #profit #Traders #brent #wti