In Bushehr Province, across the Persian Gulf from Kuwait and Saudi Arabia’s east coast, a long queue of tankers floats near the shore. These ships hold Iran’s surplus oil, which can be pumped into the market as soon as sanctions are lifted, local officials said.

But hopes for a breakthrough in negotiations over Iran’s nuclear technology programme — and the related sanctions — seem to be dwindling, as the international talks in Vienna have been suspended for a month.

Russia’s invasion of Ukraine on Feb 24 threw the world’s energy market into disarray. Iran’s negotiators suddenly became busy as global traders began to count Iranian oil as a possible alternative to Russian crude.

But the shale-rich US has not gone out of its way to accommodate Tehran’s requests.

“Russia is basically now being unplugged or disconnected from the world economy,” energy specialist Daniel Yergin told Nikkei during an interview in early March, just after the Ukraine war began. “I fear we could have a scramble for oil supplies.”

Alternative oil will come first from the Arab Gulf countries, said Yergin, who is vice chairman of S&P Global.

“You could get 2 million barrels a day more from the Gulf countries,” he said. “Secondly, if there is a nuclear deal with Iran, which seems close, that brings a million barrels a day of oil into the market.”

That fear of an oil shortage helped accelerate negotiations to revive the Obama-era Joint Comprehensive Plan of Action, otherwise known as the Iran nuclear deal.

“Apparently the negotiations on restoration of #JCPOA are about to cross the finish line,” Mikhail Ulyanov, Russia’s ambassador to the international organizations in Vienna, tweeted on Feb 22.

But some think Iran overplayed its hand, believing it had leverage in the negotiations. Instead, Tehran was caught in the middle of major powers, used as a bargaining chip.

When the US imposed sanctions on Russia after the invasion, Moscow in turn blocked the possibility of an agreement being reached in Vienna by asking for guarantees that sanctions would not impact its interests in the JCPOA.

Another obstacle was the wariness among some in Washington toward signing a deal with Tehran.

“If the US has good intentions, it should lift the previous sanctions instead of imposing new ones,” Iranian foreign minister Hossein Amir-Abdollahian said in a recent meeting with his economic deputies. “We have repeatedly told the Americans they need to take practical action such as unfreezing our assets before any agreement can be reached.”

A main issue in the talks has been the sanctions that were lifted as a result of the nuclear deal but imposed again by the government of former president Donald Trump.

Iran sees mixed messages coming from Washington. While White House press secretary Jen Psaki said that the US and its fellow countries in the Vienna negotiations were ready to conclude a strong agreement with Iran, the US treasury department announced fresh sanctions against Iranian entities.

On March 30, the treasury department slapped sanctions on companies that procured material related to ballistic missile propellants for a unit of the Islamic Revolutionary Guard Corps. The IRGC is responsible for research and development of ballistic missiles in Iran.

Iran regards the removal of the Revolutionary Guard from the US State Department’s Foreign Terrorist Organizations list as one major unresolved issue in Vienna.

“For Tehran, the removal of the FTO designation against the IRGC would tick the last box. It is very symbolic for Iran,” said Sanam Vakil, the deputy director of the Middle East and North Africa programme at the Chatham House think tank.

“However, the removal of the IRGC from the FTO designation will present regional challenges for the Biden administration,” she told Nikkei Asia.

Ilan Zalayat, an Israel-based geopolitical analyst, called Iran’s request to remove the Revolutionary Guard from the terrorist list in exchange for renewing the JCPOA “a move that is quite a precedent”, since it is unrelated to the nuclear programme.

“White House spokeswoman Psaki said lately that Iran should focus on the deal negotiated in Vienna rather than seeking to open issues outside the Vienna context, implying that the US disagrees with Iran’s demand,” he said.

Crude oil prices have surged to US$100 per barrel, and the release of Iran’s supply could impact global prices. But whatever excitement Tehran may be feeling, it does not look to be shared by Washington.

While most of the world is desperate to find alternative sources to Russian oil, the US — sitting on an abundant pool of shale — is not. That could lead to a divergence in prices between the US and elsewhere.

“Because of the energy bill that was passed in 2015, the president has the authority to end American crude exports,” geopolitical strategist Peter Zeihan said on the Hidden Forces podcast in March.

If President Joe Biden decided to shield the American public from the rest of the world’s high energy prices, “US crude prices will probably top out at a maximum of about US$70 and global prices would never drop below US$150 again,” Zeihan said.

Some question just how much of an impact Iranian oil would make.

“Even if the US lifts the sanctions, Iran would not be able to help tame the surging price in the energy market for long” after its surplus oil is sold, Vakil said.

“The only country heavily relying on Iranian oil is China. I do not think Iranian oil will be a game-changer, because Iran can only bring 2.2 million barrels per day of oil to the market. The real game changer would be if the Gulf states pumped out more oil.”

Those Arab states in the Gulf region are moving closer to Israel, which has been one of the strongest opponents of the nuclear deal, criticising it for not confronting Iran’s regional ambitions and ballistic missiles.

Geopolitical shifts are occurring because countries understand that the US is withdrawing from the greater Middle East, Zalayat said.

“For Israel and the Gulf states, the Iranian nuclear issue is one of the pressing issues, but not the only one,” he said. “The new kinship between Israel and Saudi Arabia is likely to strengthen both,” as they fight to remove unfavourable elements in the nuclear deal.

At the end of March, the foreign ministers of four Arab countries — the UAE, Egypt, Bahrain and Morocco — as well as Israel and the US held a summit in the Negev Desert, something that was almost impossible before the new geopolitics emerged.

“Israel believes that a JCPOA deal does not address regional issues,” Vakil said. “The Abraham Accords was a turning point, which will be capitalised on by the Gulf Arab states when they face issues with the Biden administration,” she said, referring to the agreements in 2020 that saw the normalisation of relations between Israel and the UAE and Bahrain.

Recently, even Turkey and Israel have buried the hatchet after more than a decade of animosity. The relationship had soured over Israel’s treatment of Palestinians, Turkish support for Hamas and disputes over natural gas in the eastern Mediterranean. Iran is seeing a rapid political shift in its neighbourhood.

For now, Iran insists on calling the status of the Vienna talks a “suspension” and not a “stalemate”. Officials say they still think a deal can be reached.

But the window of opportunity is shrinking. As the November US midterm elections approach, Biden will be uneager to pursue a deal that would upset the Jewish lobby, which traditionally has influence in congressional elections.