After nearly a year of talks, Russia walked back its threat to torpedo the revival of the 2015 Iranian nuclear deal over recent sanctions imposed over its invasion of Ukraine.
The parties involved in the pact were close to reaching a deal in Vienna until the U.S. and EU imposed sanctions on Russia. The talks were suspended last week after Moscow demanded that future trade with Iran not be affected by Western sanctions.
Russian Foreign Minister Sergei Lavrov said Tuesday that he had received written guarantees from the U.S. that its demands would be met. The release of dual nationals from Iran and the U.K. has improved prospects for an agreement.
Analysts at political risk consultancy Eurasia Group wrote in a note that a deal could come together as soon as this week.
The analysts wrote that Russia's decision to moderate its demands clears the most significant hurdle in front of the JCPOA's revival.
With the U.S. ending its imports of Russian oil and the EU looking to reduce its energy dependency on Moscow, Iranian crude is looking more attractive.
The return of Iranian oil to the market would come at a time when energy supplies are tight and crude prices are at their highest in more than a decade.
James Swanston, Middle East and North Africa economist at London-based firm Capital Economics wrote in a note Thursday that this would boost global oil supplies and could put downward pressure on prices.
If sanctions are lifted on Iran immediately, S&P Global Platts predicts that it could export an additional 500,000 barrels of oil per day to markets from April to May of this year, with that figure reaching an additional 1.3 million barrels per day by the end of the year.
Iran was the fifth-largest producer in the group. Iran was producing 3.8 million barrels of oil per day before the Donald Trump administration re-imposed sanctions on the country. According to the Atlantic Council, this has dropped to as low as 1.9 million barrels and is currently about 2.4 million barrels per day, though most of this has had to remain in storage rather than be exported due to the sanctions.
Tehran has made significant progress in terms of its nuclear activity since the U.S. withdrew from the deal.
It has shrunk its breakout time or the amount of time it would take to build a nuclear bomb. Iran's leaders said their advances would continue if the U.S. sanctions weren't lifted.
The US and Iran did not speak directly, but through European mediators, the remaining sticking points were related to sanctions.
According to analysts from Eurasia, these are unlikely to prove impossible, since both Washington and Tehran want a deal.
The prospect of a return to the deal has not sat well with Washington's Arab Gulf allies. The two did not take President Joe Biden's calls as he tried to convince them to increase their oil production.
There has been no indication from the Organization of the Petroleum Exporting Countries that it will increase its production beyond the pre-agreed increases.
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