Europe : "Iran is far towards top of our priorities for mid-term measures that will help reduce our reliance on Russian gas"

Europe : "Iran is far towards top of our priorities for mid-term measures that will help reduce our reliance on Russian gas" (TheNational).

The Europeans are also deeply interested in Iran’s gas reserves, the largest or second-largest in the world. As a European Commission source told Reuters: “Iran is far towards the top of our priorities for mid-term measures that will help reduce our reliance on Russian gas supplies”, a suggestion Russia was suspiciously quick to rubbish.

On the other hand, if the talks collapse or become moribund, we could expect an intensification of US-led sanctions, reducing Iranian exports back below 1 million bpd. That would slightly ease Opec’s task in Vienna of stemming the slump in prices.

But the most likely outcome seems to be modest progress, enough to justify a further six-month extension in talks, with some sanctions relief traded against further restrictions on nuclear activities. That would keep the sword of Damocles of Iran’s oil hanging over the markets, and it is likely that exports would creep up as some buyers, notably the Chinese, became bolder in advance of an anticipated final deal.

The core Arabian Gulf Opec countries – Saudi Arabia, Kuwait and the UAE – have enjoyed an easy ride over the past three years. Oil prices were high, and their major competitors within the Organisation – Iran, Iraq, Libya, Venezuela and Nigeria – progressively neutralised themselves by insecurity, mismanagement and political problems.

Now things are not so comfortable. The Viennese, used to hosting diplomacy, will see Opec ministers as well as western and Iranian negotiators struggling to escape one of the oil market’s thorniest questions. Read the full story here.

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