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As tension builds between the US and Iran following the killing of military leader Soleimani, S&P Global Platts covers the repercussions for global oil, natural gas, metals and petrochemical markets.

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Oil Sanctions Relief

U.S. Congress Unlikely to Block New Iran Deal, Oil Sanctions Relief

In the latest attempt to block a new Iran nuclear deal and oil sanctions relief, US Republican senators proposed June 11 a bill to require that President Joe Biden submit to Congress any renewed agreement with Tehran as a treaty.

Analysts do not expect the Republican proposal to get enough votes for passage, but they said it shows the rhetorical opposition the Biden administration faces domestically if the US and Iran both agree to return to the 2015 Joint Comprehensive Plan of Action.

"The last thing Senate Democrats want is to have to chew up valuable floor time this summer on a divisive issue like the Iran deal," Fernando Ferreira, director of Rapidan Energy Group's Geopolitical Risk Service, said in an email.

Senator Jim Risch of Idaho, the top Republican on the Senate Foreign Relations Committee, and Senator Ron Johnson of Wisconsin led 21 other Republicans in introducing the Iran Nuclear Treaty Act.

Oil Sanctions Relief Expected to Take Months After U.S., Iran Reach Deal

While oil traders appeared ready June 10 to accept an instantaneous end to US sanctions on Iran's oil sector, analysts expect the Biden administration to take several weeks or months to actually remove them after the two countries agree to rejoin the 2015 nuclear deal.

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Iran Starts to Store More Barrels at Sea Ahead of Potential Sanctions Relief

Iran is starting to build its offshore oil storage as chances of a new nuclear deal grow higher, which will enable it to reclaim its lost oil market share, trading and shipping sources said May 24.

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Iran, IAEA Extend Monitoring Deal to Clear Sanctions Relief Hurdle

Negotiations between Iran and the US on sanctions relief have cleared a major hurdle, with the International Atomic Energy Agency on May 24 announcing a one-month extension of its agreement with Tehran for access to recordings to continue monitoring Iran's nuclear activities through June 24.

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Preparing for Return to Business as Usual

Exporters, Buyers Brace for Normal Flows of Iranian LPG, Condensate

Iranian exporters aim to increase LPG exports to full capacity, if the Biden administration lifts sanctions that limited shipments from the country's petrochemical plants and gas refineries, adding to healthy Middle East supply, which could drive up freight, industry sources familiar with the sector said.

Assuming the US completely removes sanctions in second-half 2021, Iran can export 3.73 million mt during the period and at least 33 vessels will be needed for transportation, six more than currently, they said.

Russia's Lukoil 'Happy' to Resume Talks on Iranian Projects Once U.S. Sanctions Lifted

Russia's Lukoil would be "happy" to return to talks on its Iranian oil projects, which were at an advanced stage, once US sanctions on the Middle Eastern country are lifted, CEO Vagit Alekperov said June 3.

Lukoil was in talks with Iran to develop the Ab Teymour and Mansouri oil fields, but had to put plans on hold in late 2018 after the US pulled out of the Iranian nuclear deal and reimposed sanctions on the country's oil industry.

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U.S. Tensions

Analysts Still Expect U.S., Iran to Reach Deal to Lift Oil Sanctions Despite Growing Delay

A deal to remove US sanctions on Iran's oil and other energy exports still remains the consensus view among analysts, but the possibility of talks collapsing has started to grow with the delays.

The oil market would lose up to 1 million b/d of incremental supply growth through early 2022 if an Iran deal is significantly delayed or the talks get derailed altogether, said Paul Sheldon, chief geopolitical adviser for S&P Global Platts Analytics.

Raisi Backs Iran's JCPOA Negotiating Team but Says Trust Issues with U.S. an Obstacle

Iran's current nuclear deal negotiating team will continue its work, hardliner President-elect Ebrahim Raisi said June 21, assuring that talks toward an agreement which could unlock sanctions on the country's oil sales would not be derailed by his victory.

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U.S. State Department Sees Longer Road Ahead for Iran Talks, Lifting Sanctions

The US State Department signaled June 3 that indirect talks with Iran on rejoining the 2015 nuclear deal and removing US energy sanctions could stretch on for weeks.

The Biden administration had been attempting to strike a framework deal with Iran before the country's June 18 presidential election, which hardliners are expected to win.

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APAC Trade

S Korea Could Shun Some Mexican, Russian Crudes if Iran Returns to Market

South Korea will likely alter its crude oil procurement and trading strategy when Iranian barrels return to the international market, with Mexican and Russian suppliers poised to lose a big portion of their market share in the world's fifth largest crude importer.

Major South Korean refiners are keen and ready to buy Iranian crude oil if the sanctions on Tehran are lifted, as medium and heavy sour grades from the Persian Gulf producer are relatively economical.

S Korea's overall refinery systems also are better designed to process Iranian feedstocks, refinery officials based in Seoul told S&P Global Platts.

Asia Hopes it Can Revive Love Affair with Iranian Crude Sooner Than Later

Asian refiners are planning in advance to renew their love affair with Iranian crudes and fill a partial vacuum of medium and sour grades the global oil market has witnessed over the past two years, as hopes rise that Washington would likely lift sanctions on Tehran.

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Japan Could Resume Iran Oil Imports 3 Months After Sanctions Lifting

Japanese refiners could resume oil imports from Iran as early as three months after confirming Iranian sanctions were being lifted.

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Iranian Crude Blends Seen Getting Lighter to Meet Chinese Tastes

Iran's flagship crude grades could start to get marginally lighter in quality due to the fluctuating appetite of its Chinese customers, which are starting to favor lighter and more medium oil blends.

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Global Output

Iran Inaugurates New Oil Exports Terminal Outside Strait of Hormuz

Iran officially inaugurated its new $2 billion exports terminal by loading 300,000 barrels on an oil tanker off the Sea of Oman, enabling the sanction-hit country to bypass the Strait of Hormuz for oil exports.

"For the first time in the over 110 year history of Iran's oil, crude oil export operations start from Mokran shores in the Sea of Oman," the oil minister Bijan Zanganeh said in the televised ceremony.

"The 1,000 km, 42-inch pipeline can carry heavy and medium crude oil from Goureh in the Bushehr province to Jask in the Hormozgan province," Zanganeh said.

Zanganeh said the current capacity of the Goureh-Jask pipeline was 300,000 b/d and will be completed to reach 1 million b/d phase by phase.

"Because of the sanctions, the impossibility of provision of electro-pumps and... pipes brought the project to a dead end. But with help of domestic manufacturers, we could remove this problem and locally build them for the first time in the country," Zanganeh said.

Iran had accelerated construction of the pipeline in order to secure its oil shipments amid a heightening of tensions in the Persian Gulf with regional rivals Saudi Arabia and Israel, which oppose the US' willingness to reinstate the Iran nuclear deal and relax sanctions.

U.S. EIA Sees Global Oil Market Balancing in Q3 as Supply Rises

Global oil supply will match demand for much of the rest of the year as OPEC and US producers increase output, while demand continues to recover from pandemic levels, the US Energy Information Administration said June 8.

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Iran Should Boost Oil Output to 6.5 Mil b/d Under New Govt

Iran could "easily" boost its oil production capacity to 6.5 million b/d, Iran's Oil Minister Bijan Zanganeh said May 31, as US, Iranian and European negotiators are set to convene this week for more talks over reinstating the nuclear deal.

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OPEC Expects Iran's Output Hike Not to Hinder Group's Plans

OPEC expects the anticipated increase of Iran's oil production unlikely to have a negative impact on the global market and output hike plans of the OPEC+ alliance.

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