Nuclear Talks, Glutted Markets Offer Iranian Economy Little Relief

The seven-month extension of nuclear talks between Iran and six world powers agreed to in Vienna means Iran can expect little relief from sanctions that have hamstrung its oil exports and whacked its economy. What's more, even if Iran can secure some respite during the next round of talks, translating that into greater oil-sector earnings will be a tough slog, made all the harder by the sustained drop in crude oil prices.

Monday, Nov. 24's decision to blow past another self-imposed deadline and push back final resolution of Iran's nuclear program until next summer removes any chance of extra barrels of Iranian oil flooding into an already oversupplied market. That may offer some succor to OPEC members, who meet Thursday to decide whether and how to halt the five-month slide in oil prices. But it won't help Iranian leaders still banking on a recovery of oil exports to bolster the Iran's tottering economy; late last week, Iran's oil minister optimistically pledged to double oil exports if the talks were successful.

Talks will continue, reportedly starting again next month, and Iran still holds out the hope of securing relief in exchange for a final deal with the six global powers: Britain, China, France, Germany, Russia, and the United States. There is always the chance that a Republican-controlled U.S. Congress could ratchet up pressure on Iran by increasing sanctions next year, which would make it even harder for the country to increase oil exports to right its reeling economy.

Read the full article at Foreign Policy.