MOSCOW, March 19. /TASS/. The United States’ Barack Obama Administration is pushing ahead with efforts to fast-track the conclusion of a treaty on the Iranian nuclear program, which would pave the way for lifting sanctions against Tehran, including those on the export of crude oil. "The White House is trying very hard to undo the Iranian knot. It needs Tehran for many reasons. Firstly, if the sanctions go, Iranian oil may start flowing to the European market, prices will slump and Russia’s interests will be harmed, which would play into Washington’s hands," the president of the Middle East Institute, Yevgeny Satanovsky, told TASS in an interview.
"Secondly, the United States hopes to rely on Iran in its Middle Eastern policies in confronting such rivals as Saudi Arabia and Qatar, both supporters of the terrorist Islamic organization Al-Qaeda. The emergence of another major terrorist force in the regional scene - the Islamic State, which controls vast territories in Syria and Iraq - forces the Americans to act in concert with the Iranians in the struggle against that evil. Naturally, no formal alliances will be committed to paper. As for informal cooperation, it is already in progress," Satanovsky said.
"In relations with Iran the United States has preferred to follow the old-established rule: if you are unable to overpower the adversary, join him. How soon the sanctions may be lifted depends on an eon of factors, such as the stance of the US Congress, where the Republicans are against concluding a treaty on the Iranian nuclear program, on the situation in the Middle East, where a regional war may flare up any moment, and on the outcome of the presidential election in the United States.
"For its part, Russia has long demanded the lifting of sanctions against Iran, and it will not change its position. Accordingly, Russian oil companies will have to revise their strategy of fuel supplies to foreign markets bearing in mind that the sanctions against Iran will be canceled sooner or later," Satanovsky believes.
"In the context of the possibility anti-Iranian sanctions may be lifted Russia will run the risk of falling into a trap: it is unable to change its stance, although it does see the risks to its foreign economic interests. In reality Russia is trying to adjust itself to the new realities beforehand. What I have in mind is the inter-governmental agreement that envisages the export to Iran of Russian equipment and consumer goods in exchange for Iranian oil, which drew objections from the United States," oil market analyst Vladimir Averchev, a former director of research at the BP Russia holding company, told TASS.
"A number of experts are predicting that the influx of Iranian crude to the European market may cause oil prices to slump to 30 dollars per barrel, but I have very big doubts the Iranian crude will go to the European market, and not elsewhere. In any case, there has been evidence Tehran, acting through intermediaries, has long been exporting oil to China, and it will stay oriented towards the Chinese market. Besides, Iran does not have crude reserves big enough that might trigger a 50-percent slump in oil prices," Averchev believes.
"The greatest fears over the risk of an oil price collapse usually have a very moderate outcome. After the fall of the Saddam Hussein regime in Iraq there were alarmist forecasts that Iraqi oil would cause the price of crude to sink to the lowest level possible. Nothing of the sort happened. Besides, the OPEC countries will surely activate international mechanisms to keep pricing on the oil markets under control. In general, a hypothetical decision by the United States to lift the ban on the export of oil may cause a far more serious effect on prices than Iranian oil," Averchev said.
"It should be remembered that re-activating oil wells and returning them to production is a costly operation and it cannot be done overnight. So it is too early to ring alarm bells. Besides, the speculations the Iranian crude may flood the European market is just a speculation still to be proven," the analyst said in conclusion.
TASS may not share the opinions of its contributors