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Official cars are seen outside Grand Hotel Wien after a session of meeting of the Joint Comprehensive Plan of Action (JCPOA) on "Iran nuclear deal talks" in Vienna, Austria on May 01, 2021.

Askin Kiyagan | Anadolu Agency | Getty Images

A nuclear deal between the U.S. and Iran could send energy prices higher even if it means more supply in the oil markets, according to Goldman Sachs' head of energy research.

While it appears to be contradictory, a deal that brings Iranian barrels back to the market could actually see oil prices rise, said Damien Courvalin, who is also a senior commodity strategist at the bank.

Talks in Vienna are ongoing as Iran and six world powers the U.S., China, Russia, France, U.K. and Germany try to salvage the 2015 landmark deal. Officials say there's been progress, but it remains unclear when negotiations could conclude and oil prices have been seesawing as a result.

A deal would lift sanctions on Iran and bring Tehran and Washington back to complying with the Joint Comprehensive Plan of Action (JCPOA). The U.S. unilaterally withdrew from the nuclear deal in 2018 and reimposed crippling sanctions on Iran which dealt a blow to the Islamic Republic's oil exports.

If that announcement comes in the next few weeks, in our view, it actually starts that bullish repricing.

Damien Courvalin

head of energy research, Goldman Sachs

Courvalin explained his rationale. He pointed to how oil prices rose in April after OPEC+ said they wouldgradually raise output from May by adding back 350,000 barrels a day.

"An increase in production is announced that is above anyone's expectations ours included. And yet prices rally, volatility comes down," he said.

"Why? Because we lifted an uncertainty that was weighing on the market since last year," he told CNBC's "Squawk Box Asia" last week.

Investors wondered if OPEC would end up in a price war when it tried to increase production, but the oil cartel presented a "convincing path going forward," Courvalin said.

"You could argue the same for Iran," he added. Simply knowing will likely "lift some of that uncertainty."

"If that announcement comes in the next few weeks, in our view, it actually starts that bullish repricing," he said at that time.

Other analysts say an agreement could mean lower prices for oil, at least in the short term.

Morgan Stanley said in a research note that an increase in Iranian exports will probably cap Brent crude at $70 per barrel, and expects the international benchmark to trade between $65 and $70 per barrel for the second half of 2021.

Brent crude was lower by 0.13% at $71.22 on Friday in Asia, while U.S. crude futures were down 0.1% at $68.75.

"Our view is that the initial reaction to a potential deal will be a brief sell-off," Tamas Varga, an analyst at PVM Oil Associates, told CNBC in an email.

Extra Iranian barrels would be a headwind if a deal materializes, according to Austin Pickle, investment strategy analyst at Wells Fargo Investment Institute.

But softer crude prices may only be temporary.

"We suspect accelerating demand and OPEC+'s disciplined supply response will support oil prices," Pickle wrote in a note, referring to OPEC and its allies.

PVM Oil Associates expects Brent prices to reach $80 per barrel by the fourth quarter of 2021, Varga said.

He also said it will take time before Iran starts to export oil again, and global demand could have improved significantly by the time additional barrels reach the market.

Extra Iranian barrels should only delay price recovery but not throw it off course.

Tamas Varga

analyst, PVM Oil Associates

While the global economic recovery has been uneven faster in the developed world, compared to the developing world oil prices will rise more quickly when vaccine rollouts accelerate in Asia, he added.

"Extra Iranian barrels should only delay price recovery but not throw it off course," Varga said.

S&P Global Platts Analytics has the view that there is room to accommodate Iranian and OPEC+ oil supply growth in the third quarter.

Toward year-end, however, energy prices could come under pressure as Iran exports and U.S. oil production increase, said Nareeka Ahir, a geopolitical analyst at S&P Global Platts. She said Brent could fall to the mid or low $60s in late 2021 into 2022.

Goldman Sachs sees Brent crude prices rising at a faster pace, and predicts the international benchmark could hit $80 by the third quarter of this year.

Courvalin noted that Asia's oil demand has been revised lower due to new waves of the virus, and that has been been offset by upside surprises in the U.S. and Europe.

"It really paints a picture where, once vaccination rates progress sufficiently, you really see pent-up mobility get unleashed, and a significant increase in oil demand," he said. "That's the root of the bullish view."

He said supply will likely lag the pop in demand, and there will be "plenty of room" to absorb oil from Iran.

"In fact, if you told me Iran's not coming back, our $80 dollar forecast is way too low relative to where the oil market is heading by 2022," he added.

Concerns over an Iran deal and the pandemic may have "masked a fast-tightening oil market," Courvalin said.

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Goldman says a nuclear deal with Iran could send oil prices higher. Not everyone agrees - CNBC

CAIRO Mysterious fires sank Irans largest warship and burned a big Tehran oil refinery on Wednesday seemingly unconnected blazes that nonetheless raised suspicions the country had once again been targeted by Israeli saboteurs.

The fires broke out hours apart as Iran was reporting progress in talks aimed at resurrecting the international nuclear agreement scrapped three years ago by the Trump administration, which the Biden administration wants to restore. Israel, which regards Iran as a dangerous adversary, opposes such an accord, contending it will not stop Iran from weaponizing nuclear fuel.

Revival of the accord would alleviate onerous economic sanctions imposed by the United States in exchange for guarantees that Iranian nuclear work remains peaceful.

Iran has sought to prevent recent acts of sabotage from derailing the nuclear negotiations. But it has acknowledged serious security holes and Israels infiltration abilities, including an explosion that wrecked part of its Natanz uranium enrichment complex less than two months ago.

Israel has tacitly acknowledged responsibility for the Natanz explosion and attacks on other Iranian nuclear facilities, as well as the brazen killing of a top nuclear scientist. It neither confirmed nor denied any role in the fires.

The blaze on the warship, the Kharg, broke out as the vessel was deployed in a Gulf of Oman training exercise. The Tasnim news agency described the Kharg as a training and logistical ship that had been in service for more than 40 years. The exact cause of the fire was unclear.

Military and civilian crews battled the fire for 20 hours before the ship sank off the coast of the southern port of Jask, Tasnim reported. The crew members managed to evacuate after the fire broke out and were transferred to shore, the report said, suggesting that there were no casualties.

The Kharg, also spelled Khark in English, serves as a naval replenishment ship and is Irans largest vessel by weight, according to an analysis of Irans navy.

Later Wednesday, a massive fire broke out at a large state-owned petrochemical refinery in south Tehran. Billowing plumes of smoke and flames could be seen from all corners of the capital more than 12 miles away.

The head of Tehrans emergency response committee, Mansour Darajati, said a leak in one of the pipelines carrying liquid gas had caught fire and caused an explosion, according to state media.

Iranian media accounts said at least 18 storage tankers were in flames and quoted Tehrans mayor as saying more than 100 fire trucks had been deployed from every Tehran firehouse to battle the inferno. Photos from Tehran also showed long lines of motorists at gasoline stations, reflecting fear of fuel shortages.

Although official Iranian media did not ascribe blame, the historical pattern was not lost on many Iranians, given the history of covert Israeli operations on Iranian targets. Just hours after the ship fire, the refinery blaze erupted.

We cant assess definitely what has happened it could be from structural damage or sabotage, said Saeed Shariati, a political analyst in Tehran. With our sensitivity there is always the possibility of an attack.

In April, an Iranian military vessel stationed in the Red Sea was damaged by an apparent Israeli mine attack, the first time Israeli-Iranian skirmishes at sea had affected an Iranian ship used for military purposes.

Political analysts outside Iran viewed the Kharg fire as more than a coincidence, even though some Iranian naval calamities have been accidental.

Obviously, the thing were all looking for is if the Israelis are involved, said Sanam Vakil, deputy director of the Middle East and North Africa Program at Chatham House, a research organization in Britain. The Israeli security establishment is using this period to define some new red lines vis--vis Iran and really demonstrate their capacity.

Israel, she added, has been sending a message to the United States and the region that it is willing to act independently in order to protect its security interests.

The Iranian port of Jask sits on the Gulf of Oman near the Strait of Hormuz, a vital shipping lane that leads to the Persian Gulf. It is an area where the fraught relations between Iran, the United States and its allies have played out. Beginning in 2019, ships in the Gulf of Oman suffered a series of maritime guerrilla attacks, crippling commercial oil tankers and spooking worldwide oil markets.

The United States said that the attacks were a tacit threat by Tehran to block the shipping artery and accused it of having targeted the ships with limpet mines, even releasing a video that showed members of Irans Islamic Revolutionary Guards Corps removing an unexploded mine from a vessel. Iran denied attacking the ships.

Yet Iran also has a history of naval disasters that are apparently unrelated to external enemies. During a military training exercise last year, a missile from an Iranian frigate mistakenly struck another ship near the same port, Jask, killing at least 19 sailors and wounding 15.

It may not be easy to distinguish clumsiness from obfuscation. Iran played down Israeli involvement in recent attacks in an effort to lower tensions and avoid acknowledging Israels successes, blaming instead internal sabotage.

Its bad if its their own fault, and its bad if the Israelis are behind it, Ms. Vakil said. Its embarrassing either way. So the question is: How are they going to spin this?

Vivian Yee reported from Cairo, and Farnaz Fassihi from New York.

Read more:
Fires Sink Irans Largest Warship and Ravage Big Refinery - The New York Times

LONDON The board game is roughly 4,500 years old. Shaped like a bird of prey, it has holes running down its wings and chest, where the pieces were once positioned. Its one of a few dozen ancient objects that were set to travel from the National Museum of Iran for a spectacular exhibition at the Victoria & Albert Museum here. But they never came.

Other artifacts that were set to be shown as detailed and illustrated and in the catalog for that exhibition Epic Iran included a gold mask, a long-handled silver pan and a carved stone goblet. To secure the loans, the museum was in longstanding talks with the National Museum of Iran until early 2020, said Tristram Hunt, the director of the Victoria & Albert Museum, also known as the V&A.

At a certain point, silence began to descend, and I dont think that was internal to them, he said in an interview. There were outside political forces.

Ironically, the overarching purpose of Epic Iran, according to Hunt, was to put aside the political tensions that have dogged relations between Iran and the West since the overthrow of the monarchy and the establishment of an Islamic Republic.

We want people to take a step back and understand that Iranian history didnt begin in 1979, he said. The point was to look beyond the paradigm of what is called Islamic fundamentalism, and concerns around nuclear testing and visions of the ayatollah, he added, and understand the richness, and breadth, and depth, and complexity, and beauty of Iran.

On display in the V&A show, which runs through Sept. 12, are an astounding array of artworks and treasures spanning 5,000 years: from the remnants of the earliest civilizations to the creations of contemporary artists living in Iran today. The full gamut of arts and crafts practiced for millenniums in Iran is illustrated with centuries-old carpets, illuminated manuscripts, miniature paintings, sculpted ornaments, court portraits and fine textiles.

More broadly, hostilities between Iran and the West were exacerbated during the presidency of Donald Trump. He pulled the United States out of a 2015 deal to curb Irans nuclear capability, toughened economic sanctions against Iran and ordered the killing in January 2020 of Irans most powerful security and intelligence commander, Maj. Gen. Qassim Suleimani.

Cultural collaborations between Iran and the West have suffered as a result, said Nima Mina, who taught Iranian studies for 20 years at the School of Oriental and African Studies, University of London.

In post-Revolution Iran, everything has been politicized, he said. Cultural institutions and artists had to align with a certain ideological and political agenda, as artists did in the Soviet Union, he said.

The Islamic Republic is an ideological, autocratic regime, so its difficult to be apolitical, even if somebody tries, he said.

The V&A is not the only Western museum to try and fail to secure loans from Iran. In 2016, a long-planned Berlin exhibition of works from the Tehran Museum of Contemporary Art was canceled when Iranian officials withheld export permits for the works. Half of these were by Western artists such as Picasso, Gauguin, Mark Rothko and Francis Bacon, and came from a collection assembled before the revolution by Irans empress, Farah Pahlavi.

Originally, the V&A under its former director, Martin Roth had planned to exhibit the private collection of the Sarikhanis, a British-based family from Iran who own hundreds of pieces of Iranian art and heritage. When Mr. Hunt took over the V&A in February 2017, he decided to turn the exhibition into something broader and more extensive, incorporating treasures from the collections of the V&A and other international museums.

One of the most important objects in the show has been lent to the V&A by the British Museum: the Cyrus Cylinder, a small clay tube from the sixth century B.C. that Cyrus the Great, the Persian Empires founder, buried under the walls of Babylon after he conquered it. Etched in cuneiform the writing of the ancient Babylonians the Cyrus Cylinder was a charter for good governance in which Cyrus pledged not to rule by oppression and dictatorship and tyranny, said the exhibitions co-curator, John Curtis, the British Museums former keeper of the Middle East department.

What the cylinder demonstrates is that Iran was a land of religious tolerance, and that it had enlightened rulers two and a half thousand years ago. The British Museum included it in a popular 2005 exhibition, Forgotten Empire, which also aimed to open Western minds to the countrys ancient culture and history.

That show received a very important loan from the National Museum of Iran: a silver tablet documenting the foundation of Persepolis, the Persian Empires capital city. The tablet traveled to London in the face of quite considerable press comments and complaints that the British couldnt be trusted to return them, said Neil MacGregor, the British Museums director at the time. In return, Iran asked to borrow the Cyrus Cylinder, which traveled to Iran in 2010, amid trepidation in London that it might never come back. (Those fears were unfounded: The priceless object was returned.)

As well as artifacts from Irans past, two rooms of Epic Iran on modern and contemporary art show that Iranians were active participants in 20th-century art movements, and today produce cutting-edge photography, painting and installations.

The high ratio of female artists on display including the photographers Shadi Ghadirian and Shirin Aliabadi demonstrates that Iranian women have transcended gender inequality and restrictions such as the compulsory veil to produce and display their work.

This final section of the show put together by the associate curator Ina Sarikhani Sandmann, whose family lent extensively to the exhibition also coincides with the most recent period in Iranian history, a period of revolution and still-raw divisions. Wall texts seem to reflect those tensions.

They refer to the monarchys authoritarian rule, its ties to economically exploitative Western powers, and its self-aggrandizing attempts to channel Irans pre-Islamic past, which incited dissent and led to the revolution. Post-revolutionary Iran, on the other hand, is described as being isolated and attempting to open up to the rest of the world despite hard line domestic policies and international economic sanctions.

The choice of words in reference to the Islamic Republic is very cautious, said Mina, the academic. He said it was probably out of a desire not to jeopardize Iran-based artists participating in the show. As a rule, painters, photographers, filmmakers, and sculptors in general had to be loyal, conformist, or at least not challenge the government to continue their art practice, he said.

Despite the loan setbacks, Hunt, the V&A director, said he hoped the show would pave the way to collaborations: The exhibition was always intended as a two-way exchange, he said.

It would always be nice to have a relationship with Tehran, which wed like to build on in the future, he added.

See the rest here:
Looking Beyond the Ayatollah to the Treasures of Iran - The New York Times

Reports that two Iranian frigates may be steaming into the Atlantic toward Venezuela ought to concentrate minds in the Biden Administration. So much for Iranian goodwill amid President Bidens determination to rejoin the 2015 nuclear deal.

The vessels destination isnt clear, and they could still turn back. But when asked by reporters on Monday about U.S. monitoring of the frigates, an Iranian foreign ministry spokesman said Iran has constant presence in international waters, is entitled to this right on the basis of international law, and can be present in international waters. He added: I warn that nobody should make a miscalculation. Those who live in glass houses must be cautious.

Irans navy isnt the U.S. Sixth Fleet, but the entry of warships into Caribbean waters would be a notable provocation. If it sails into these waters without resistance, a precedent will be set for adversarial navies operating in the region. Dont be surprised if Russia and China decide to join the party in the future.

Iran is a long-time Cuban ally, and since Hugo Chvez turned Venezuela into a dictatorship 20 years ago, Tehran has nurtured an ever-closer relationship with Caracas. The two regimes have engaged in joint defense ventures in the Venezuelan state of Aragua, and Venezuela is known to supply fake identities to Iranian operatives to move around the region.

Venezuelas point man for Iran is Tareck El Aissami, now oil minister. Iran is an essential energy supplier for the South American basket case, where domestic gasoline production has collapsed amid a shortage of resources, maintenance failures and corruption.

Read more:
Irans Navy Heads to the Americas - The Wall Street Journal

The two countries both of them facing severe U.S. sanctions have developed closer ties over the last few years, with cooperation ranging from gasoline shipments to joint car and cement factory projects.

Senior officials in President Nicols Maduros government in Caracas have been advised that welcoming the Iranian warships would be a mistake, according to a person familiar with the discussions. But its not clear whether Maduro has heeded that warning: At one point on Thursday, U.S. military officials understood the ships had turned around, but as of Friday morning they were still steaming south, one of the people said.

Lawmakers privy to the most sensitive intelligence information were informed over the past few days that the U.S. believed the Iranian ships may be heading toward Venezuela, but cautioned that the destination could change, according to a person briefed on the matter.

The mere presence of Iranian warships in Americas backyard would represent a challenge to U.S. authority in the region and would likely inflame the debate in Washington over President Joe Bidens decision to re-open negotiations with Tehran.

Iranian media has claimed the 755-foot long Makran, which was commissioned this year, can serve as a platform for electronic warfare and special operations missions, and Iranian officials have boasted of the ships missile and weapons capabilities. It is able to carry six to seven helicopters, as well as drones, they have said.

A spokesperson for the Venezuelan Foreign Ministry declined to comment. A spokesperson at the Iranian Mission to the U.N. declined to comment. And White House and Pentagon spokespersons declined to comment.

The timing of Irans apparent westward foray is especially inopportune for those hoping for a lowering of tensions with Tehran.

Since entering office, Biden has explored rejoining the 2015 agreement to curb Irans nuclear program, the Joint Comprehensive Plan of Action, which his predecessor Donald Trump abandoned in 2018. Those talks are ongoing in Vienna. The recent fighting between Israel and the militant group Hamas, long backed by Iran, also has fueled criticism from Republican lawmakers about the wisdom of re-entering the JCPOA.

Successive governments in Tehran and Caracas have made a habit of defying the United States, with whom each country has a complex history. The Venezuelan government was one of the first to recognize the Islamic Republic after the 1979 overthrow of the shah, a U.S. ally in the Middle East.

Tehran regularly objects to the presence of U.S. warships in the Persian Gulf region, and it has previously threatened to make a similar show of force in Americas backyard but never followed through.

Maduros authoritarian regime has been shunned by many countries, including its Latin American neighbors. The United States has imposed successively harsher rounds of sanctions that have punished an economy already wracked by mismanagement, corruption and Covid. Iran is one of Venezuelas few close allies.

As Venezuelas oil refining sector has collapsed in recent years, the Islamic Republic has sent multiple fuel tankers to the country to help with crippling gas shortages. In exchange, Venezuelas government has supplied Tehran with much-needed cash and helped it build relationships in Latin America.

U.S. officials have watched those ties blossom with varying levels of concern.

In December, the top commander of U.S. troops in Central and South America described Irans growing military presence in Venezuela as alarming. In comments reported by The Wall Street Journal, Adm. Craig Faller, the commander of U.S. Southern Command, said the presence of personnel from Irans elite Islamic Revolutionary Guard Corps Quds Force is particularly concerning.

The Trump administration designated the Revolutionary Guards a terrorist organization in 2019, and killed its Quds Force commander, Gen. Qasem Soleimani, last year in an airstrike in Iraq.

Last summer, U.S. authorities seized four ships carrying cargo from Iran to Venezuela, as the Journal reported. At one point on their journey, those ships and five others were traveling with an Iranian naval intelligence ship, U.S. officials told the paper. The ships did not reach Venezuela.

More:
U.S. monitoring Iranian warships that may be headed to Venezuela - POLITICO