The Oil Market is Watching Lausanne

Radio Farda - On Wednesday night, analysts spoke of the emergence of a 'nervous state' in the global oil market, attributing it to the negotiations taking place in Lausanne regarding Iran's nuclear program. Mir-Ali Hosseini asked Fereydoun Khavand, an economist based in Paris, what traders in the oil market think about the nuclear negotiations in Lausanne. Fereydoun Khavand: It seems that in relation to the negotiations and difficulties arising in the nuclear talks in Lausanne between Iran and the P5+1 group, traders in the global oil market are also confused and do not know whether to be optimistic or pessimistic about the outcome of these talks. It should be noted that after three consecutive days of falling oil prices, on Wednesday, the price of this commodity rose in both the New York and London markets, and this seesaw movement was considered a sign of a kind of confusion or nervous state in the market. In fact, in the past few days, as the new round of nuclear talks in Lausanne gained momentum, oil prices began to decline because speculators and traders relied on the certain success of these negotiations; as a result, sanctions would be lifted, paving the way for Iran's oil exports to double. With this calculation, they concluded that increased oil supply from Iran would lower the price of this commodity. With this speculation, oil prices decreased. However, on Wednesday, as the tensions in the Lausanne nuclear negotiations escalated, speculators began to doubt their previous calculations, took the deadlock scenario of the negotiations seriously, and this caused oil prices to rise again. If an agreement is reached regarding Iran's nuclear file, will oil prices fall again? The realization of this scenario is entirely possible, especially considering that Mr. Zangeneh, Iran's oil minister, has repeatedly stated that if sanctions are lifted, his country's oil exports will double within a few months. Nonetheless, there is no shortage of ambiguity regarding Iran's future role in the global oil market. The most important question is whether the sanctions will be lifted after reaching an agreement in Lausanne, or with the signing of the final agreement on the nuclear file next June, or even over a longer period that the West will impose on Iran. Another question pertains to Iran's ability to double its exports in a short time. These questions and doubts naturally fuel confusion in the global oil market. Besides the nuclear talks in Lausanne, what other factors currently affect the global oil market? The intensification of geopolitical crises, including the potential deployment of Saudi soldiers to ground warfare in Yemen. Of course, the most important factor affecting oil prices is supply and demand. Currently, oil is abundant in the market, but this situation cannot last long.