For the time being, however, the Trump administration’s increasingly hawkish position on Iran has not been enough to offset the impact of increasing supply from shale.
Crude traders may be under-estimating the president’s determination to end what he has termed a “terrible” deal and ratchet up the pressure on Iran.
But the president and his new secretary of state, assuming the nominee is confirmed by the U.S. Senate, will still face the same diplomatic constraints in ending the deal and renewing the boycott of Iranian oil.
European countries, including Britain, France and Germany, are no more eager than before to abandon the nuclear deal or re-impose broad economic sanctions.
Russia is also unlikely to cooperate since relations and cooperation with the United States are at the lowest ebb since the end of the Cold War.
And the United States has embarked on a trade war with China, which is further complicating a relationship already beset by multiple other disputes.
In the circumstances, traders may have concluded even a failure to recertify the deal will not lead to the removal of a significant amount of crude from the market.
