An Iran nuclear deal that would lead to the country pumping more oil is unlikely to materialize any time soon, according to Goldman Sachs, despite crude prices falling sharply in recent days on hopes of an agreement. Goldman analysts, including Callum Bruce, said in a note Tuesday that a stalemate is "mutually beneficial" to the US and Iran, Business Insider writes.
Oil prices have fallen back to levels seen before Russia's special operation in Ukraine in recent days, in part because of signs of progress on the Iranian nuclear talks. The European Union has led efforts to revive the deal, which limited Iran's nuclear ambitions in exchange for lifting some sanctions, but which was scrapped by US President Donald Trump. This week, Iran said it was happy to progress with talks along lines proposed by the EU.
But Goldman's analysts said oil markets had gotten ahead of themselves and that Iran and the US have fewer incentives to sign a deal than is commonly assumed. "Revived relations between the US and Saudi Arabia also reduce the likelihood of the Biden Administration seeking to obtain additional barrels from a nation it maintains no formal diplomatic relations with."
If a deal were agreed, Iran would take around 12 months to fully ramp up its oil production, Goldman said. The bank estimated Iran would increase its output to 3.7 million barrels a day, from 2.7 million barrels currently. Exports would likely take several months to pick up. Without sanctions, Iran has capacity to export some 2 million barrels a day of oil.
Goldman said an Iran deal could lower its $125 a barrel forecast for Brent crude next year by around $15 a barrel. Brent traded at around $92 Wednesday, having fallen around 13% over the last month.
