U.S. Mulls Changing Course as Nuclear Talks Stall: Iran Snapshot

(Bloomberg) -- Here is a snapshot of what’s happening with Iran, its nuclear talks and energy markets.

Latest developments

U.S. officials are reviewing their options on Iran after months of talks about a revival of a 2015 nuclear accord with the Islamic Republic failed to produce an agreement, according to people familiar with the matter.

Although still calling for a return to the pact, the U.S. is willing to weigh alternatives, including the interim step of limited sanctions relief in exchange for Iran freezing its most provocative nuclear proliferation work, they said.

The Biden administration faces the sobering reality that returning to the accord may no longer be feasible, as Tehran finds ways to cope with American sanctions and, potentially, build an atomic bomb.

Tensions between the countries have heightened with a deadly drone attack on a ship in regional waters on July 29 which Washington and its allies have blamed on Tehran. Iran has denied involvement.

The ascension (cuts words) of Iran’s new hard-line president, Ebrahim Raisi has also complicated diplomacy. Envoys are waiting on his administration to say when it wants to resume the negotiations in Vienna.

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Oil

Oil extended last week’s heavy losses, with Brent falling almost 2% to around $69.36 a barrel in early trading on Monday. Investors are concerned about the impact on fuel consumption of the delta variant of the coronavirus. Its rapid spread has led Goldman Sachs Group Inc. to downgrade China’s economic growth forecast.

If U.S. sanctions on Iran are eased, many analysts think Tehran could increase oil production by around 1 million barrels a day within months.

Agenda

Monday, 7am London: Iran’s Foreign Ministry scheduled to hold a press conference

This week: Raisi expected to announce his choice of cabinet members

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