Iran talks that could sway global oil supply by 1.5 million b/d to resume Nov. 29

The next round of Iran nuclear talks, which could swing global oil supply by 1.5 million b/d next year, have been set for Nov. 29 in Vienna after a five-month pause.

Iran's chief negotiator, Ali Bagheri Kani, said in a tweet Nov. 3 that he had agreed to the date in a call with EU envoy Enrique Mora.

EU officials confirmed the date in press release, adding that representatives of China, France, Germany, Russia, and the UK will also attend.

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.

S&P Global Platts Analytics expects Iranian oil supply to rise to 3.66 million b/d by December 2022 if a deal is reached and US oil sanctions are removed. If talks are delayed further or collapse, the Iranian supply outlook would fall to 2.17 million b/d.

Asked where the talks would pick up, US State Department spokesman Ned Price said during a Nov. 3 press conference that "it would be neither productive nor wise to take up from any other position from where we left off in June at the conclusion the sixth round."

Price reiterated that a deal was still possible, but the window would eventually close.

"We still believe that is in our national interest, precisely because it would once again impose permanent and verifiable limits on Iran's nuclear program and it would foreclose Iran's ability to ever acquire a nuclear weapon," he said. "But we've also made the point that at some point, the advancements Iran has made, the knowhow that Iran has garnered throughout this process will make a return to the JCPOA ... not worth it as proposition for the United States and our partners. We are not there yet."

No-deal scenario

Henry Rome, a senior analyst with the Eurasia Group, said the date for the talks did not change his pessimism about reaching a deal this year (10% odds) or next year (30% odds).

"The chances of reaching a compromise are very limited given the Iranian government's hardline stances and internal divisions, as well as greater demands from the West for new restrictions in response to Iran's nuclear progress," he said in a recent note.

Rome had previously considered a JCPOA revival as likely in 2022, if not in 2021, "given the overwhelming structural incentives for Iran and the West's clear interest in reviving even a weaker version of the agreement."

Paul Sheldon, Platts chief geopolitical adviser, said the no-deal scenario would test the world's spare oil capacity in 2022, and the geopolitical impacts would also be "markedly bullish" for oil markets,

The talks have stalled since mid-June when the sides paused for the Iran elections and were expected to start up shortly after President Ebrahim Raisi took office in early August.

The Platts OPEC survey estimated Iran produced 2.52 million b/d in September, up 20,000 b/d from August. The US Energy Information Administration estimates Iranian production at 2.5 million b/d since June.