Prospects for Iran deal, US oil sanctions relief unchanged in latest Vienna talks

The latest round of talks over restarting the Iran nuclear deal ended without progress Dec. 3, leaving in place a massive question mark over 2022 global oil supply.

S&P Global Platts Analytics expects Iranian oil supply to increase by 1.4 million b/d by December 2022 if a deal is reached and US oil sanctions are removed in the second quarter.

But those barrels would disappear from global oil supply outlooks if no deal is reached, potentially pressuring declining international stocks and OPEC+ spare capacity by Q3.

The Eurasia Group sees a 10% probability of a revival of the nuclear deal this year and a 20% probability in 2022.

"Expectations for the talks were very low, and they have largely met that bar, with Iran presenting maximalist positions and Western parties repeating that time is running short," said Henry Rome, Eurasia Group's director of global macro research.

The US State Department criticized the new Iranian leadership Dec. 3, saying it "did not come to Vienna with constructive proposals."

"The first six rounds of negotiations made progress, finding creative compromise solutions to many of the hardest issues that were difficult for all sides," a State Department spokesman said in a statement. "Iran's approach this week was not, unfortunately, to try to resolve the remaining issues."

The Joint Comprehensive Plan of Action reached in 2015 set restrictions on Iran's nuclear program in exchange for relief from US sanctions. The Trump administration reimposed sanctions on Iran's oil, petrochemical, shipping and other sectors in 2018.

The Platts OPEC survey estimated Iran produced 2.52 million b/d in October, unchanged from September. The US Energy Information Administration estimates Iranian production at 2.5 million b/d since June.

Iran's output averaged 3.79 million b/d in 2017, according to the Platts survey.