Negotiations between Iran and the P5+1 — the US, the UK, France, China, Russia, and Germany — ended in failure yesterday. The six-nation team sought an end to Iran’s nuclear enrichment program in exchange for some trade concessions. Iran sought an end to current and future sanctions on oil shipments in exchange for concessions on its nuclear development program.
A last-minute agreement was reached to hold another two-day meeting in Moscow on June 18th and 19th, but the most positive thing anyone could find to say was that Iran was now talking about its nuclear program which the country has refused to do before.
The price of Brent crude is up this morning by about 0.6% at $107.17, partly in reaction to the failed talks and partly in response to more pressure on Germany from other EU nations to issue eurobonds. Some crude traders have said that the “fear premium” added about $5/barrel to crude prices due to Iranian threats to close the Strait of Hormuz. The impact of further sanctions against the Islamic Republic, set to take effect July 1st, would further isolate the country and its oil, and add even more to crude prices.