Benchmark crude oil prices may rise in the second half of this year if Saeed Jalili, Iran's chief nuclear negotiator and front runner in presidential elections, wins the vote scheduled for June 14, analysts told CNBC this week.
The election in Iran – whose economy has been crushed by oil export-limiting sanctions – "could be a pivotal event for perceived risk, potentially pushing oil prices higher" in the second-half of this year and into the first half of 2014, Alastair Newton, Senior Political Analyst at Nomura said in a research report this week.
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Jalili, 47, who wears a prosthetic leg after being injured during the Iran-Iraq war while serving with the Revolutionary Guards, "may emerge as the winner, probably after a June 21 second round," Newton explained. He's "a close ally of supreme leader Ali Khamenei, is from the conservative wing of the ruling elite and has committed to a hard line with the international community in nuclear negotiations."
Cliff Kupchan, Middle East director at political risk consultancy Eurasia Group, believes Jalili's policy on the country's controversial uranium enrichment program, which Iran insists is purely for peaceful purposes, would be little different to that of outgoing Iranian President Mahmoud Ahmadinejad, and believes a hardline approach may continue to keep global oil markets on edge.
"Jalili, as clearly shown by his campaign statements, would be Ahmadinejad 2.0 on nuclear and foreign policy matters," Kupchan said.