Iran’s return to nuclear deal may lower oil prices by $5

The possible return of Iranian oil to the market won’t bring shocks to the oil market, according to Goldman Sachs experts, Report informs referring to Reuters.

“With OPEC+ appearing to manage its exit for now, supply concerns will likely shift to the potential return of Iran to the JCPOA (Joint Comprehensive Plan of Action) agreement,” Goldman Sachs said in a note.

The US expects the talks with Iran, about both sides resuming compliance with the 2015 Iran nuclear deal, to be “difficult” and does not foresee any early breakthrough.

The path to an agreement would still likely take months, Goldman Sachs said, adding that other OPEC+ producers would accommodate a potential ramp-up in Iran’s production.

A normalization in Iranian exports before the end of 2021 would reduce Goldman’s year-end 2021 and 2022 Brent forecast of $75 per barrel by $5, while the lack of an agreement in 2022 would create more than $10 upside risk, it said.

Goldman said it expects a significant rebound in oil demand this summer even after expecting an additional 2 million barrels per day increase in OPEC+ production after July.