Interim Nuclear Deal: Key Implications
BMI View: Iran and the 5+1 powers clinched a landmark interim deal on the Islamic Republic's nuclear programme on November 24, paving the way for a partial easing of sanctions. However, we caution that progress towards a more permanent agreement will face substantial difficulties. Our below consensus forecasts for oil prices have largely priced in the impact of continued negotiations, and we note that a return of significant volumes of Iranian crude to the market remains off the cards for now.
Iran and the 5+1 powers (the United States, Russia, China, France, Britain and Germany) clinched an interim deal on the Islamic Republic's nuclear programme on November 24, following four days of negotiations in Geneva. Under the agreement, which will last for six months while a more permanent and comprehensive settlement is found, Iran will curb some of its nuclear activities in return for an immediate gain of approximately US$7bn in sanctions relief (see table below). US President Barack Obama called the deal "an important first step toward a comprehensive solution that addresses our concerns".
A More Substantive Deal Faces Significant Challenges
|A Modest Price Drop|
|Brent Oil Prices, US$/bbl|