The taking apart of the deal

摘要

The US decision to renege on the Joint Comprehensive Plan of Action (JCPOA) and reimpose sanctions on Iran leaves the rest of Opec with a dilemma. The organisation’s pact with non-Opec producers has succeeded in its nominal aim of bringing commercial oil inventories in the OECD back to the historic five-year average. It has also helped to move prices back above $70/bl. But the Opec/non-Opec production deal is morphing into a framework for longer-term co-operation among producers. And the immediate pressure to ease up on supply constraints will be greater should significant amounts of Iranian oil be lost to the market again.