Lifting oil sanctions on Iran could hit global markets long before the nation starts pumping more crude.
That’s because the OPEC member has been stockpiling oil onshore and in supertankers in the Persian Gulf, according to data compiled by Bloomberg. While estimates of the hoard by shipbrokers and government officials vary from as little as 7 million barrels to as much as 35 million, Barclays Plc and Societe Generale SA predict this crude would be first to be sold abroad if there’s an agreement on Iran’s nuclear program.
The U.S. and five other world powers are scheduled to resume talks with Iran this week, offering relief from sanctions on oil exports, shipping and financial transactions if the Islamic Republic curtails its nuclear program and allows inspections to verify compliance. If a deal is reached, the Persian Gulf nation could add its stockpiles into an oversupplied oil market where prices have fallen more than 50 percent since June.
“The first wave to look out for when these sanctions are removed is that stored oil coming back into the market,” Miswin Mahesh, an analyst at Barclays in London, said by e-mail on March 23. “Their ability to sell from storage will depend on whether shipping and insurance restrictions are also lifted.”