Editorial: Iranian Entente

"The early bird gets the worm, but the second mouse gets the cheese." – Willie Nelson (1933 - )

In the early hours of Monday morning, a historic deal was reached between seven world powers in the Swiss city of Geneva. On one side of the table the P5+1 – the permanent members of the UN Security Council plus Germany – representing 28 per cent of the world’s population and 7.9 per cent of the world’s oil reserves combined. On the other side, The Islamic Republic of Iran, representing one per cent of the global populous but 10.4 per cent of the world’s oil.

On one side of the table, parties jubilant over the "substantial limitations" agreed with regards to the outcast nation’s nuclear programme. On the other side, the pariahs rejoice about their guaranteed right to enrich uranium for peaceful purposes and a temporary relaxation of sanctions on petrochemicals, precious metals and the automotive sector.

The six-month long consensus could lead to a further easing of the embargoes placed on Iranian industry, enabling the release of up to 800,000 barrels per day into the global market as early as December. While this signifies an amount equal to less than 0.9 per cent of current daily world consumption, analysts have forecast that Brent crude may to drop to $90 by the end of calendar year 2014 and further mollification in relations could see crude at $70 per barrel by the end of 2020.

Roman statesman Marcus Tullius Cicero once asked cui bono "who stands to gain?" from any given enterprise. In this situation, every seat around the negotiating table believed that they had won a victory. If we ask cui malo "who stands to lose?", then the State of Israel would put up an aggrieved hand, as would the host of nations that base their national economies on the production and sale of hydrocarbons.

Maybe the greater mass of petroleum exporting nations have played second mouse long enough?...

Tim Haðdar is the Editor In Chief at Oil & Gas IQ. Reach Him At Twitter Or OGIQ