Iran can quickly hike oil exports as politics allow

Significance

Tehran’s more sophisticated sanctions avoidance tactics and greater willingness to test Washington’s enforcement have substantially boosted exports from 2019 lows. The slow progress on a US-Iranian mutual return to compliance with the 2015 nuclear deal, the Joint Comprehensive Plan of Action (JCPOA), has increased market uncertainty.

Impacts

• Before sanctions lifting, limited waivers might add a few hundred thousand b/d of exports to US allies such as India, Japan and South Korea.
• New foreign oil investment will depend on views of Tehran’s domestic politics after June polls and the durability of a deal with Washington.
• Post-sanctions, Iran’s efforts to regain market share will create tensions with OPEC+ partners in quota negotiations.