By Barani Krishnan

Market longs have been thinking about how to deal with Iran if it becomes a significant problem in the future. 

Now, the question is resurfacing with greater urgency as Washington approaches its final opportunity to rein in Tehran’s nuclear plan with a carrot that will allow the Mullahs to legitimately put their oil exports back on the market.

New York’s WTI settled at $91.32 per barrel on Monday. This was a 1.1% decrease from Friday’s high of $93.17 in 2014. WTI was up 30% for seven consecutive weeks prior to this slide. 

“WTI could go down to between $85 and $82 if we continue getting positive headlines on the Iran talks,” said John Kilduff, partner at New York energy hedge fund Again Capital.

The London-traded, which is the international benchmark for oil, fell 0.7% to $92.64 at 2:35PM ET (2:35 GMT). This was after Friday’s peak of $93.70, seven years ago. Brent gained 27% during the previous seven weeks. 

After reports suggesting the possibility of an immediate U.S. Iran nuclear agreement, crude oil prices dropped for the first seven sessions following talks that have dragged out for over a year.

“This can’t go on forever because of Iran’s nuclear advances,” an official from the U.S. State Department, speaking on conditions of anonymity, was quoted as saying by Reuters on Monday. “This is not a prediction. This is not a threat. It is not an artificial deadline. It is a condition.

According to another official, the official said that “Given Iran’s pace and nuclear advancements, there are only a few weeks to reach a deal — then it will be impossible to return to JCPOA or to regain the nonproliferation advantages that the agreement provided us.”

The JCPOA is short-hand for the 2015 nuclear deal between Tehran and the five permanent members of the U.N. Security Council — the United States, the United Kingdom, Russia, France, and China — along with Germany. 

The agreement was clinched during the term of former  U.S. president Barack Obama, a Democrat, and was canceled in 2018  when his successor Donald Trump, a Republican, was in office. Biden, who took office in 2021, allowed talks to resume with Iran but kept Trump’s sanctions against Tehran in place, to the surprise of many. 

As an additional sweetener to a deal Washington already reinstated sanctions waivers for Iranian foreign nuclear power companies. This is in order to facilitate international cooperation on non-military nuclear energy usage. 

Reuters, however, noted last week in a report that the waiver also aims make it difficult for Iran not to use its nukes for weapon development.

Iran insists its nuclear resources are for power generation, however, the International Atomic Energy Agency has stated that Tehran may soon have atomic bomb-grade technology if they don’t stop.