Oil Crashes On Rehashed Report US, Iran Near Deal Allowing Tehran To Export 1MM Barrels For Reduced Uranium Enrichment

With the proverbial well of bearish oil news running dry, the market has had to resort to some ”old faithful” narratives like for example, pariah state Iran preparing to flood the market with oil any minute. Sure enough, moments ago oil crashed more than $4 because the Middle East Eye, of all places, reported that ”Iran and the United States are nearing a temporary deal that would swap some sanctions relief for reducing Iranian uranium enrichment activities, two sources with direct knowledge of the talks told Middle East Eye.”

We have, of course, seen hundreds of such reports in recent years, only to have them all promptly denied, but it’s been at least a few weeks since the last iteration, and the algos have forgotten about this particular story ark so they were quick to pounce and short oil which crashed from $73 to $69 in minutes.

The MEE cites an Iranian official and ”a person close to negotiations” (who may or may not be short oil) who claim that the talks have taken place directly on US soil ”marking a notable development in the diplomatic process”; however, it adds, there is still reluctance on the US side to rejoin the 2015 nuclear deal known as the JCPOA (because that won’t happen).

Leading the Iranian delegation is Amir Saeed Iravani, Iran’s recently appointed ambassador to the United Nations, who also played a pivotal role in the initial stages of the Iran-Saudi Arabia reconciliation talks in Baghdad. On the American side, Robert Malley, the US special envoy on Iran, has engaged in several face-to-face meetings with Iravani.

Negotiations have reportedly made significant headway and the two sides have reached an agreement on a temporary deal to take to their respective superiors, the sources said.

Under the terms of the deal, Iran would commit to ceasing its 60 percent-and-beyond uranium enrichment activities and would continue its cooperation with the International Atomic Energy Agency (IAEA) for the monitoring and verification of its nuclear programme.

In exchange, the sources claim, Tehran would be allowed to export up to a million barrels of oil per day and gain access to its income and other frozen funds abroad.

The MEE further hedges by admitting that it is up to Iran to decide if such a deal materializes:

While the progress seems promising, the ultimate decision lies with senior Iranian officials. Iravani has conveyed the details of the agreement to the senior decision-makers in Tehran for their approval. However, it remains uncertain whether the supreme leader and the national security council will give their consent.

Historically, Iranian authorities have been opposed to interim deals such as this, a former diplomatic official told MEE, especially during the 2017-2021 second presidential term of Hassan Rouhani.

We, for one, are quite skeptical: a story of this magnitude would have been leaked to some deep state outlet like WaPo, not what is at best a B-grade regional outlet; instead what may be happen is that an opportunistic oil bear is taking advantage of a gullible market to test a rehashed narrative.

That said, look for official denials in the next few minutes: if none comes, then the emerging picture is that Washington will fold on sanctions with Iran (just like it did with Venezuela) to offset the growing anti-US sentiment within OPEC+.