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What We're Watching: Soaring oil prices, inching towards an Iran nuclear deal

Soaring oil prices, inching towards an Iran nuclear deal

Models of oil barrels and a pump jack are displayed in front of a rising stock graph

REUTERS/Dado Ruvic

Rising energy crisis? Barely a week after Russia’s invasion of Ukraine, energy prices are going up faster than most experts predicted. Brent oil rose above $119 a barrel on Thursday, while Dutch natural gas futures — the benchmark for Europe — were trading at the equivalent of $360 per crude barrel. What’s more, prices are already soaring before Western sanctions have targeted Russian oil and gas, which could provoke Moscow into cutting off supplies to Europe. Why is this happening? Demand for Russian commodities has plummeted over fears that the next wave of sanctions will include energy. This week, the US and 30 other countries announced the release of 60 million barrels of oil from their strategic reserves to stop the bleeding, but that won’t be enough if the Russians turn off the tap. Will the Europeans continue supporting tough sanctions when their citizens start complaining about the cost of electricity bills and gas at the pump?

Is the Iran nuke deal being revived? The 2015 nuclear deal with Tehran could reportedly be revived within the coming days or weeks. The head of the International Atomic Energy Agency plans to visit Tehran on Saturday to try to iron out a couple points of contention and shore up support for the accord, which would give Iran sanctions relief — likely including lifting bans on its oil exports — in exchange for Tehran hitting the brakes on its nuclear program. But critics say that the Biden administration’s push to return to the terms of the 2015 deal is misguided because Iran’s nuclear program is now significantly more advanced. Since the US abandoned the deal in 2018, Tehran has been upping its uranium enrichment game, a claim supported by the Vienna-based IAEA, which said Thursday that Iran is close to having enough material to make an atomic bomb. Meanwhile, a former US State Department official tweeted Wednesday that the US was preparing to lift sanctions on the powerful Islamic Revolutionary Guards Corps as well as on the supreme leader's office, though those claims have not been corroborated.


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