Iran and the International Atomic Energy Agency (IAEA) had announced on Saturday that they have reached an understanding over the need to adopt a common approach to sort out issues between them, and this would serve as a prelude to arriving at the possible restoration of the Joint Comprehensive Action Programme (JCAP) between Iran and the United States, China, Russia, France, Germany, and the United Kingdom.

The JCAP which was agreed on in 2015 was revoked by former US President Donald Trump in 2018. Meanwhile, Russia wanted guarantees that its cooperation with Iran should not be blocked because of the anti-Russia sanctions in Europe. There is fear that the Russian demand could delay the Iranian settlement because the West is unlikely to make any concessions to Russia on the Iranian front.

According to  think-tank Energy Aspects co-founder Amrita Sen, “Iran was the only real bearish factor hanging over the market but now if the Iranian deal gets delayed, we could get to tank bottoms a lot quicker especially if Russian barrels remain off the markets for long.”

Sen said that Brent crude could reach $125 per barrel on Monday, and then could shoot up to $147.

A JPMorgan analyst expected that the crude oil price could go up to $185 in the year. The Western countries may want to reach a deal with Iran, with or without Russia in it, to ensure supplies of oil in the global markets.

It remains a bog question whether the Western sanctions against Russia in the wake of the war in Ukraine will be confined to Europe, or whether they would extend to Russia’s engagement in Asia, especially in the Middle East.

There could be serious developments if Russia is cut off from its Asian commitments because there would be a power vacuum in Syria and parts of Africa. With France withdrawing its troops from Mali last month, the security situation in Western Africa could become brittle if the Russians are excluded.

But America and the European Union (EU) might insist that the fallout for Russia because of the war in Ukraine would not be confined to Europe, and it would extend to Russian presence in Africa and Asia as well.

It is also the question whether Russia would be able to keep to its commitments in West Africa and the Middle East while fighting a full-scale war in Ukraine and fending off against the economic sanctions imposed by the West.

If the Americans and Europeans were to insist that the sanctions against Russia would be worldwide, it would mean that the world is drawn into the Ukrainian war. It is assumed that Russia would find China a ready importer of its oil and gas exports. But it may not be possible for China to absorb the whole of oil exports from Russia.

There has also been talk of India coming to an understanding with Russia through rupee payments, an arrangement that was in place for some time in the 1980s, in the last years of the Soviet Union. But this may not help Russia to survive the crippling effects of the sanctions. Russia’s role as a formidable military and diplomatic power would also be curtailed.

The purpose of the Western sanctions against Russia is indeed to weaken and isolate Russia in the world. It has to be seen whether America and NATO can impose their will across the world when they are confronting Russia in Europe. Russia too has limited global outreach in terms of the military and the economy. Both NATO and Russia might end hurting each other’s prospects, militarily and economically, if the Ukraine confrontation does not end soon.