Iran Nuclear Talks Extended as World Powers Try to Bridge Rifts

World powers and Iran are unlikely to reach a final agreement in the current round of talks to revive their 2015 nuclear deal, Iranian officials said, cooling speculation that U.S. sanctions on Tehran’s key oil exports might soon be lifted.

Diplomats had hoped to fully restore the landmark deal before Iran’s June 18 presidential elections, after which the presidency of Hassan Rouhani will wind down. He’s widely expected to be succeeded by a hardliner who will be more hostile to the U.S. and the nuclear deal.

But on Tuesday, Ali Rabiei, spokesman for Iran’s government, said that negotiators now expect to finalize a deal in August, when Rouhani’s tenure ends. He said there were “no obstacles” in the way of negotiators in Vienna, who are in their eighth week of talks.

Oil-market participants are attempting to gauge when Iran will be in a position to ramp up crude production and exports.

“We’re close to an understanding over principal, nuclear issues,” Rabiei told reporters in a televised news conference, adding “some differences such as Trump’s sanctions and Iran’s measures need to be worked out.”

Rabiei didn’t give further details but his comments echo a statement from Iran’s lead negotiator, Abbas Araghchi, who told Iranian state TV on Monday that the talks were complicated and diplomats would probably need more time to resolve outstanding issues.

Delegations were likely to return to their capitals by the end of the week to consult with their governments on sticking points, he said.

The comments came hours before the Organization of Petroleum Exporting Countries and its allies met to discuss output. They moved to hike production in July but made no decision beyond next month. Whether Iran returns to international markets or not will be a key factor in their decision-making in the coming months.

Brent gained 1.6% on Tuesday morning in Europe, trading around $70, following the comment from Iran as markets modified expectations of when Washington is likely to ease sanctions on Iran’s energy sector.

Iranian oil exports, which are the country’s largest single source of foreign-currency revenue, plunged after then-U.S. President Donald Trump withdrew from the nuclear deal in 2018 and imposed sanctions.

If a deal is reached and Washington removes its penalties, Iran may be able to ramp up exports quickly. Oil Minister Bijan Namdar Zanganeh said on Monday his country should aim to raise production to a record of around 6.5 million barrels a day.

Analysts estimate daily output could rise to about 4 million barrels from 2.4 million.

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