Iran’s Rapid Oil Comeback Looks Less Likely After Tanker Attack - Bloomberg

Iran’s Rapid Oil Comeback Looks Less Likely After Tanker Attack - Bloomberg

Iran’s oil comeback, already taking longer than many traders expected, will be further complicated by last week’s deadly drone attack on a tanker in the Gulf of Oman, which the U.S., U.K. and Israel all blamed on Tehran.

With talks held up by a change of presidency in Tehran, the incident adds friction to a process that could return 1 million barrels of oil a day to the global market within months. Even if the allies decide against a military response, Washington may be less willing to ease sanctions on the Islamic Republic’s energy exports.

“It looks inevitable that this will cast a black cloud over nuclear talks” between Iran and world powers including the U.S., said Bill Farren-Price, a director at energy-research firm Enverus.

The negotiations -- to revive a 2015 pact that limited Iran’s atomic program in return for sanctions relief -- had already stalled. A sixth round in Vienna broke up last month. Diplomats are waiting for Iran to re-enter talks now that Ebrahim Raisi, an austere cleric who has long argued against a rapprochement with the U.S., has become president.

Restoring the Joint Comprehensive Plan of Action -- which then-President Donald Trump pulled the U.S. out of in 2018 -- is key to Iran’s ability to increase oil production. Its crude exports have plummeted to almost nothing from more than 2 million barrels a day in mid-2018.

Many oil investors had expected a new nuclear deal before Iran’s elections in mid-June.