Just after negotiations between Iran and the U.S., Britain, Russia, China, France, and Germany resumed on Wednesday, Reuters reported that Iran has been pursuing ballistic missiles.
While talks between the two sides hinge on uranium enrichment and the Iranian Nuclear Energy program, the missiles are a serious concern for powers in the region.
And although there has been some relief from sanctions for the Iranians during the talks, allowing them to export more of their oil, the new information will throw another wrench in the gears.
Their hopes of permanently lifting sanctions and that they will be able to produce some of their oil and gas reserves could now be in jeopardy.
According to the EIA, Iran has the world’s fourth largest proven oil reserves – 154 billion barrels of crude and the world’s second largest natural gas reserves with an estimated 1,187 trillion cubic feet.
The talks could’ve revolved around a deal allowing the National Iranian Oil Company to expand their production and exports of their oil and natural gas in exchange for curbing their nuclear program and allowing U.N. oversight.
Thing is… this new report on Iran expanding its ballistic missile program has led to more uncertainty surrounding the negotiations than ever before.
For example, Russia doesn’t want to involve ballistic missiles in the talks since they are meant to focus on curbing the Iranian nuclear program. Not to mention that Iran and Russia have engaged in missile technology trading before.
Meanwhile, Iran’s National Oil Company announced on Sunday that they renewed an agreement with China to export about 400,000 barrels of oil per day to the growth starved nation.
Then again, the company also claims that Iran’s oil production will breach 4 million barrels per day by March 2015 which could mean more exports to China and elsewhere in the future (personally, I’m not buying it).
Still, the U.S. and the other Western powers involved will have plenty of reasons to panic if Iran has ballistic missiles capable of traveling great distances. Imagine a point in the near future when Iran is capable of inciting fear – even war – in an already tumultuous region of the world.
Thing is, if talks stall with the new missile concerns, and the sides don’t reach an agreement by the July 20th deadline, Iran’s oil and natural gas production and export could suffer… which will inevitably lead to certain crude oil realities as global oil prices climb higher.
Until next time,