A successful Iranian nuclear deal would undoubtedly be a big step forward - for cheap oil, for the Iranian economy and maybe even for political stability in the Middle East. But Tuesday morning's signatures in Vienna on an agreement that limits Iran's nuclear programme are still a long way from becoming a geopolitical milestone.
An increase in Iranian oil production from last year's depressed total to the pre-sanction level of 2011 would add 750,000 barrels a day, or 0.9 per cent, to the world's supply. In a tightly balanced market, that could be enough to keep downward pressure on the price. The 2011 level of output could come as soon as the end of 2016, since restrictions on crude exports and equipment imports are set to end as soon as the agreement is ratified.
Longer term, the price-depressing effect could be greater. Iran's peak production in the 1970s was six million barrels per day, about 70 per cent above the current pace. The end of sanctions could lead to big investments in old and new oil and gas fields. Also, oil and gas exports have been held back by profligate domestic consumption. Invest-ment in energy-saving technology and nuclear power would free up more hydrocarbons for export.
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Optimists must be patient, though. The deal has to overcome political flak in the United States and Iran. Both Barack Obama and Hassan Rouhani, the two countries' presidents, could slip in the face of entrenched opposition.
The agreement has an easy way to fail, a "snapback" of sanctions in 65 days if Iran is judged to have broken the terms. With nearly 100 pages of text to be conformed to and endemic mistrust on all sides, it will be all too easy for this potentially big step to turn into just another misstep.
