Iran Update

September 2018


4 scenarios by RBC Capital Markets

(1) Waiting Game

Oil price neutral. Iran honors its commitments under the nuclear deal attempting to wait out the Trump administration. Europe provides guarantees to keep companies operating in Iran.

(2) Continued Escalation

Oil price risk $5-10/barrel. Iran resumes suspended nuclear activities but allows international inspectors to visit the declared sites to verify that the program remains for civilian purposes. Iran continues to stay within the Nuclear Nonproliferation Treaty.

Iran increases support for the anti-Saudi Houthi rebels in Yemen and for Hezbollah. More ballistic missile attacks.


(3) Even more aggressive

Iran completely withdraws from the nuclear treaty and tries to curtail maritime traffic through the Strait of Hormuz and Bab-el-Mandeb. Iran steps up cyber attacks, like malware erasing Saudi Aramco data. Geo-political risk premium: $10-15/barrel but would be difficult to cap.

(4) Strategic Miscalculation

A Houthi missile hits a major Saudi infrastructure site and causes heavy civilian casualties. If Russia is unable to keep Iran and Hezbollah under control near the Golan Heights and if Iran kicks out international inspectors fears would mount that Israel could preemptively attack an Iranian nuclear facility.

August 2018



April 2018


Data for May and June 2018 not yet available

May 2016


In January 2016 the US lifts nuclear related sanctions on Iran