As the Trump administration continues to slap more sanctions on Iranian oil and launches a flurry of enforcement actions, seizing Iranian weapons and oil bound for Venezuela, some are hedging that a potential Biden victory could lead to a relaxation of sanctions on Iran and a return to the market of Iranian oil.
According to the Oil Price website, Markets would have to keep in mind, however, that in the event that Biden wins and even assuming (unlikely) that one of his first actions would be to allow Iran to resume oil exports, it would still take Iran 12 months at the minimum to ramp up to any market-threatening volumes. That would, in turn, potentially be timed with best estimates of a COVID-19 vaccine, which would precede an uptick in oil demand.
And even then, this is a best-case scenario for Iran, which is getting by with sanctions-busting exports at the moment, most recently using the Iraqi coast as a waypoint for avoiding US sanctions.
It is not likely that Biden would immediately move to open the Iranian oil floodgates. The Democrats are not necessarily foaming at the mouth to cater to Iran after the incidents of this past year.
The genie that’s been let out of that bottle is rather more difficult to put back in at this point. Biden has indicated that he would seek to revive the nuclear deal with Iran; however, another deal would potentially carry wider restrictions for Iran than the 2015 deal did, and there is no fast-track scenario for such negotiations.