Market Overview

FBR Expects Iran Nuclear 'Understanding' To Be Announced This Week


According to FBR & Co. analysts, oil investors should be prepared for an Iran nuclear agreement to be announced this week, which could remove the cap on Iranian oil exports. The report by FBR indicates that analysts see a growing probability that an Iranian agreement will be announced in the next several days, although they are not confident what form that agreement will take.

Lowering The Bar

Analysts see major unresolved issues remaining with time running out on the March 31 negotiation deadline and believe that the world might see something more in the form of a conceptual understanding rather than a "framework agreement" with clearly-defined points.

Key parts of any announcement would likely include a removal of sanctions and a path toward increasing Iran's oil exports. Analysts believe that announcing a general understanding this week would allow more time for the details of the agreement to be ironed out prior to the next deadline in June.

Related Link: What Iran's Nuclear Deal Could Mean For Oil Prices

Common Ground

According to the report, negotiators seem to be on the same page in several areas. "Common ground appears to have been found on a number of key issues, including the number of centrifuges Iran would retain, limits on fuel stockpiles and other equipment, as well as medical research," analysts explain.

Sticking Points

Analysts believe that the largest point of contention at the moment seems to be limitations on Iran's nuclear research and development. According to the report, Iran is refusing to accept any restrictions on its nuclear program.

In addition, Iran's cooperation with potential international nuclear inspections and the country's willingness to disclose information about past nuclear programs remains unclear.

Shares of United States Oil Fund LP (ETF) (NYSE: USO) are up about 1 percent on Monday.


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