With oil prices hitting almost $120 this week, market watchers await the outcome of indirect talks between the United States and Iran in Vienna to see if sanctions imposed on Tehran’s oil exports will be lifted and global supplies boosted amid the Ukraine crisis.
However, any agreement will not immediately allow Iran to legally export oil as compliance with the agreement would take a few months to verify, Reuters said, adding that the same happened in when the first nuclear deal was inked in 2015 when it took a few months until Iran began exporting crude.
Most refiners around the world have also shunned Iranian oil for several years and they would need two to three months to finalize technical arrangements to enable imports from Iran to resume, analysts said.
Iran has tens of millions of barrels of oil in storage that can be released once its compliance with the nuclear agreement is verified, but some of that oil is heavy condensate and not very helpful to lower prices.
The analysis said that it would take Iran up to six months to raise output by around one million barrels per day.
OPEC led by Saudi Arabia has refused to break an agreementreached before the Russian invasion and boost output.