Doubts about success increasing before meeting in Moscow 18-19 June

Third round of negotiations over Iran’s nuclear programme

On Monday 18-19 June, Iran and the P5+1 meet in Moscow for the third round of negotiations over Iran’s nuclear programme. The risk of collapse in the talks has increased since the last meeting after Iran and IAEA recently failed to agree on a deal to allow wider nuclear inspections.

In addition, the relationship between Iran and the P5+1 seems to have turned worse lately and this has created an atmosphere of doubt about the success in Moscow. Failure to make progress in the third round of negotiations increases the pressure on the parties to reach a peaceful resolution.

A total breakdown in the negotiations can push up the risk premium and thereby oil prices as the likelihood of an Israeli military attack on Iran’s nuclear facilities increases.

• The US and the EU are expected to push for a shut down of the nuclear facilites at the Fordo underground bunker, handing over uranium stockpiles at close to 20% enrichment and maybe push for a deadline for Iran to suspend near-weapons grade enrichment.
• Iran is expected to demand sanction relief.
• The wide distance between the two parties’ expectations and requirements will likely prevent a near-term agreement.
• In the meantime, the US and EU sanctions will go ahead at the end of June, complicating Iranian oil sales and putting pressure on the razor-thin OPEC spare capacity.

Fear of collapse can push up risk premium

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