Download now: King Coal Triple Play

Iran Nuclear Discussions

Nations Meet, Oil Falls

like +7 (0) dislike

By Justin Williams
Thursday, February 28th, 2013

Earlier this week, a meeting in Almaty, Kazakhstan was held between Iran and 6 world powers known as the P5+1. The group included the U.S., China, France, Russia, Britain (P5), and Germany (1).

The gathering comes 8 months after the two sides met in Moscow and could reach no agreement in regards to Iran’s nuclear program.

In January, Iran was pumping out 2.6 million barrels of oil a day—the lowest output since February 1990. And in the 8 months in which no progress was made over the struggle with Iran’s nuclear intentions, it cost the Persian Gulf nation $98.9 million a day in oil sales.

Now, Iran has become the Organization of Petroleum Exporting Countries’ 5th-biggest producer along with the United Arab Emirates, a drop from last year when it was number two behind Saudi Arabia, reported Bloomberg.

The spark of debate started with Iran’s recent discovery of uranium resources that has nearly tripled its reserves of radioactive fuel to 4,400 tons, according to Bloomberg Businessweek. The nation has been working to increase its uranium enrichment capabilities ever since.

The U.S. and some UN Security Council members have suspicions that it’s a covert nuclear weapons program. In assuming the worst, there are fears that a new war may erupt and that a possible arms race could be ignited in the Middle East.

Israel, the Middle East’s only nuclear power, has already made threats against Iran if the nation ever does possess a nuclear weapon. Iran, not one to back off, threatened retaliation if ever attacked.

In the past year, Iran has made strides to increase activity in direct defiance of demands set forth by those same members it met with this week.

Thus a number of sanctions have been imposed upon Iran: oil, banking, shipping, trade, petrochemical, and gold.

For Iran to have its sanctions lifted and regular operations resumed, the nations initially saidall work on its 20 percent enriched uranium must cease. A grade of 20 percent uranium makes it close to becoming explosive and highly reactive; enough to build a bomb.

Reuters was told by members of P5+1 that sanctions would be lifted on the trade of gold and precious metals if Iran would close Fordow, its underground enrichment operation; Iran holds steadfast that it is not enough to make it budge.

But as the BBC reports, officials eventually agreed to allow Iran to keep small amounts of enriched uranium.

After 8 months, both sides came back to the table to reconvene in hopes that a long-term agreement can be made and that all sanctions can eventually be lifted. This week they agreed to refrain from imposing additional sanctions.

Bloomberg reports:

“We have come here with a revised offer and we have come to engage with Iran in a meaningful way,” Catherine Ashton, the European Union’s foreign-policy chief who serves as lead negotiator for the six partners, said before the start of talks today. The six powers want to see a “good and detailed conversation, with the ambition that we see progress by the end of the meeting.”

And in the same Bloomberg report:

Ashton’s spokesman, Michael Mann, said the six partners have prepared “a good and updated offer” that is a “balanced and a fair basis for constructive talks.” It addresses international concerns that Iran may be seeking a covert nuclear-weapons capability, while also being “responsive to Iranian ideas” presented at three rounds of talks from April to June last year that failed to achieve a deal.

There was one wild card at this week’s meeting: the U.S. offered to meet one on one with Iran, away from everything else, to simplify matters.

Iran’s Supreme Leader Ayatollah Alikhamenei publicly scoffed at the notion, saying Iran wouldn’t negotiate with a gun to its head—a reference to the imposed sanctions, according to a Bloomberg report.

The Best Free Investment You'll Ever Make

Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the newsletter below.

Enter your email:
We never spam! View our Privacy Policy

You'll also get our free report, "Nuclear's Worldwide Expansion" by our resident expert Jeff Siegel.

Iran had been firm with its position leading up to the meeting. They adamantly protest that the uranium program is strictly a peaceful endeavor, created for civilian and medical use.

Still, Iran attended the meeting with an open mind and a willingness to listen to what the P5+1 has to say; it did, however, reject any violation of its right under the international treaty to enrich uranium for peaceful civilian use.

A big breakthrough did not occur, though movements were made. The hope is for progress and more talks in the near future, with a plan that would eventually include both sides taking action.

But there is also a presidential election this coming June that may impede progress from being made.

Nuclear power and uranium—it not only has an effect on Iran, but its impact is felt everywhere. As when John Kerry, the U.S. Secretary of State announced that there was hope for a promising solution to Iran’s nuclear program: oil fell as a result.

There is a lot of uncertainty, though future productive meetings may be a step in the right direction.

Media / Interview Requests? Click Here.

New Report: Nuclear's Worldwide Expansion

The report is yours, FREE. Just tell us where to send it. We'll also sign you up for our FREE Energy and Capital e-mail newsletter where you'll discover the foresight and vision to exploit the stock and investment opportunities of the new energy economy.