Oil Prices Could Face Shock If Biden Wins, Saves Nuclear Deal

Iran's oil supply could surge back onto the market with a deal

Thoughtout 2020, the price of oil has been uneasy, with demand weakened dramatically by the coronavirus pandemic. Too much supply, not enough demand, and the price goes down. The US has been struggling to keep the price up, by keeping global supply limited.

The upcoming election could dramatically change all of that. Former Vice President Joe Biden is up in the polls. There is a very real possibility that he will win the election, and turn the US to the P5+1 nuclear deal with Iran.

If the US returns to the nuclear deal, and starts complying with it, this would open Iran’s 3.8 million barrels of daily production to the open market. The sales of a meaningful several percent of world’s oil output could drag prices down, possibly dramatically.

The US would likely try to pressure OPEC for more cuts to avoid price volatility, but that’s easier said than done. Sen. Bob Menendez (D-NJ) suggested Biden should go for a “tougher” Iran deal, which might be done to delay putting the oil back on the open market.

After the US dishonored the first deal, a new tougher deal would be a tough sell, to say the least. That may be the point, however, allowing the US to give lip service to scrapping Trump’s policy but remaining every bit as intransigent.

Biden promised back in September that he would offer to rejoin the deal if Iran returns to compliance. This may be a campaign promise he’ll be pressured not to keep by hostile members of Congress from both parties.

Author: Jason Ditz

Jason Ditz is senior editor of Antiwar.com.