Today, Securing America’s Future Energy (SAFE), in partnership with the Foundation for Defense of Democracies (FDD), played host to an expert panel discussion in Capitol Hill’s Rayburn House Office Building. The talk, “Extended Nuclear Negotiations with Iran: An Oil Market Perspective,” sought to reveal in detail the price of oil’s effect on ongoing extensions over the future of Iran’s nuclear program, and vice versa.
Opening remarks were delivered by Congressmen Ed Royce (R-CA) and Eliot Engel (D-NY), Chairman and Ranking Member of the House Committee on Foreign Affairs. The panel was moderated by Quartz Washington Correspondent Steve LeVine and included:
- Mark Dubowitz: Executive Director, Foundation for Defense of Democracies
- John Hannah: Former National Security Advisor to the Vice President, Member of SAFE’s Commission on Energy and Geopolitics, and Senior Fellow at FDD
- Robert McNally: Founder and President, the Rapidan Group
- Sam Ori: Executive Vice President, Securing America’s Future Energy (SAFE)
Each panelist sought to bring their organizational or career expertise to the discussion, allowing for a rich and in-depth conversation on the interactions between the global oil market and Iran negotiations and how these two influence one another.
The event coincided with the release of SAFE’s newest Intelligence Report, a collaboration with macroeconomic firm Roubini Global Economics, “Iranian Nuclear Negotiations: As Talks Extend, Oil Markets Tilt the Balance in Favor of the P5+1
.” The report assesses the impact of current global oil market dynamics on Iran and the ongoing negotiations with the P5+1 over the country’s uranium enrichment activities.
Today’s well supplied oil market, the report finds, has increased the economic challenges facing Iran under current sanctions while also creating room for additional sanctions, potentially tilting the balance in favor of the P5+1 as negotiations extend into 2015. Panelists emphasized that despite current rhetoric that our energy security concerns are largely resolved, periods of oil market oversupply are in fact extremely rare. Consequently, the present conditions create a unique opportunity to increase sanctions and leverage against Iran, without risking oil price spikes or greater volatility.
Panelists use the report as a springboard for a lively and multi-faceted discussion, calling on historical precedent in similar situations to illustrate the potential in today’s period of low oil prices, such as Saudi Arabia’s use of its oil supplies to drive down prices in the mid-1980s, damaging Soviet oil revenues and accelerating the federation’s eventual fall.
Importantly, panelists also recognized the recent return of intense volatility to the oil market, prompted by record U.S. production, sluggish demand growth, and an OPEC’s recent decision not to cut production in their most recent meeting. All were quick to note the urgency of acting from a current position of strength, one where Iranian oil matters less on the oversupplied global market, to find a resolution to the nuclear question that best serves American interests and those of the global community.
“This price drop is sowing the seeds for another price spike before too long,” pointed out Rapidan founder Bob McNally, illustrating both the importance of the current moment and offering a strong warning for those who think the world has settled into a period of cheap oil indefinitely. John Hannah noted that while current oil market conditions afford the United States the rare ability to come to the negotiations from a position of strength, these gains could be made permanent if the nation managed to shift away from oil dependence entirely through expanded adoption of alternative fuel vehicles.
Video of today’s event will be available soon, and make sure to download SAFE’s latest report
on Iran and the P5+1 for an in-depth and insightful analysis of what this period of oversupply affords the coalition in the way of negotiating power.