Iran: fusion deplomacy

A deal to suspend development of Iran’s nuclear programme might avert a more immediate showdown, but it will leave few smiling faces in the Middle East. It will also increase polarisation in the US government, as Obama will need to sidestep Congress to “suspend” sanctions.  But the most immediate economic impact will be on oil prices.  Iran should be able to pump an additional 1mn bpd in a matter of months.  This will further incentivise the Saudis to discount prices; both to retain market share in the face of the return of its former competitor and to undermine the Iranian economy itself.

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