When Iranians vote to elect a new president on May 19, traders and Mideast observers will be watching, but it is unlikely that Tehran, or the United States and the European Union for that matter, will renege on the Iranian nuclear deal and that the election outcome will have a significant impact on world oil prices.

“I don’t think it’s in the best interest of the Iranians to try to cheat and I don’t think it’s in the best of the US and Europeans to renege on the sanctions,” Fadel Gheit, a senior energy analyst at Oppenheimer in New York told New Europe by phone on May 11.

“The sanctions and the agreements and all these things, they were negotiated over a long period of time. It is not a 20-minute sit down talk with Donald Trump who doesn’t have the attention span of a five-year-old kid. These are grown up people and they know what they were saying and what they were doing and they finally reached an amicable and verifiable and fair deal,” Gheit said, adding that it’s unlikely that the internal politics in Iran could jeopardise the Iranian nuclear deal with the West.

The gradual removal of sanctions from Iran allows the Islamic country to gradually return to the export markets. “The Iranians want better standard of living instead of what they have. I mean the government has been basically blindfolding them for so long,” Gheit said. “I think probably the Iranian clergy are starting to sense the unhappiness of the people so my view here is that I don’t think that this election or geopolitics in general will have the same impact as historically was the case,” the Oppenheimer analyst added.

At the end of the day, the geopolitics is not really as important as it once was. “Everybody is looking at market balancing between supply and demand and there seem to be a lot of confusion,” Gheit said.

While the Organization of Petroleum Exporting Countries (OPEC) is adhering to the productions cuts, shale production is likely to increase very rapidly in the US, the New York-based analyst said.

During a meeting in Vienna on November 30, 2016, OPEC decided to reduce oil production to 32.5 million barrels per day. On December 10, non-OPEC countries agreed to reduce the output by another 558,000 barrels per day. OPEC and non-OPEC countries vowed to start implementing the deal from January 1, 2017 for six months and looks like they will extend it for another six months.

“Actually OPEC acknowledged that they expect US production now to increase, to almost double, the increase will double from the original forecast, and instead of 500,000 barrels a day more last year, it will almost be 1 million barrels above last year’s level,” Gheit said, adding that most oil companies are promising to increase production this year and next.

“In my view, I don’t think that the market is going to be focused on the election whether it’s the election in France or the election in Iran or the election in the US. I mean, we’ve seen a lot, we’ve seen civil wars and conflicts over the last three-four years and in the old days that used to have big impact on oil prices. That’s not the case right now,” he said.

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