The Impact of Decertifying the Iran Nuclear Deal on the Oil Markets
President Trump may not certify to Congress the Iran nuclear agreement. If this happens, three possible scenarios:
a. Decertify but no recommendation for action: no impact on the oil market (most likely)
b. Decertify and recommend modification: No impact on the oil market
c. Decertify, revoke, and recommend sanctions: The impact in this case is listed below from a set of tweets I posted recently @anasalhajji
1- If US returns same old sanctions on Iran, oil exports will decline. Any decline in oil production is minor.
2- We will end up with a significant gap in production between secondary sources and direct. communications in OPEC data in both Iran and Iraq.
3- Iran might resort to its old strategy: sell oil as if it were Iraqi oil, build massive floating storage, and use more oil in power generation and export oil embedded in electricity.
4- More oil and products will be sent to countries like Syria and Venezuela.
5- Countries that will play every one includes China, India, and Egypt. They would receive Iranian oil anyway. Oh, do not forget France!
6- The impact of return of sanctions on oil prices is measured in the short and medium terms. We WILL NOT HAVE A SPIKE! About an average of $3 premium.
7- The price premium is NOT a political premium. It is just the impact of losing some exports.
8- However, sanctions will have a significant impact on the plans to increase oil production capacity in Iran. In a sense, the impact in the long run on the oil market could be higher than the impact in eth short run.
9- What Iran accomplished energy-wise during the previous sanctions was truly amazing and a case study in energy policy.
10- The switch from gasoline to CNG and the building of small refineries in a short period worth studying.
11- This chart explains some of the points above: