The glut of global oil may be accelerating the thaw in relations between the U.S. and Iran.
The announcement on Saturday that economic sanctions against Iran have lifted frees roughly $100 billion to flow into Iran, which can resume oil exports. The end to the embargo came after United Nations inspectors certified that Iran honored commitments to dismantle major parts of its nuclear program.
The Iranians reportedly met their nuclear-related promises months ahead of schedule. The speed reflected in part a determination by Iranian President Hassan Rouhani to boost the flow of funds into the treasury before parliamentary elections slated for next month.
“They were highly motivated to get it done,” an American official told the Times, which notes that the falloff in oil prices has slashed the Islamic Republic’s national revenue.
Iran says it can produce 500,000 barrels of oil a day. That would add to an oversupply that has pushed prices to below $30 a barrel, their lowest in a dozen years.
The action by Iran to dismantle its nuclear program and the lifting of sanctions culminates a deal reached in July between the Iran and six world powers: the U.S., Britain, France, China, Russia and Germany.
The end of sanctions means that Iran can connect with the international financial system, and that Iranian business can trade with the EU. Details for trade between Iran and the U.S. may take longer to hammer out.