Oil Slides 2% as Iran Nuclear Deal Advances

By Adedapo Adesanya

The prices of oil fell by 2 per cent on Thursday as talks to resurrect a nuclear deal with Iran entered their final stages, with the Brent crude losing $1.84 or 1.9 per cent to trade at $92.97 per barrel and the US West Texas Intermediate (WTI) down by $1.9 or 2.0 per cent to settle at $91.76 per barrel.

Iran and the United States may be nearing a deal, which would limit the upside potential for oil and possibly even cause prices to fall further despite the bullish expectations.

The agreement between both countries could unlock more crude supplies into the global oil market amid ongoing tension between a top exporting country, Russia, and the West over Ukraine.

The new optimism for a nuclear deal that would see US sanctions lifted from Iran came with a tweet from the main negotiator of the country, Mr Ali Bagheri Kani.

“After weeks of intensive talks, we are closer than ever to an agreement; nothing is agreed until everything is agreed, though. Our negotiating partners need to be realistic, avoid intransigence and heed lessons of past 4yrs. Time for their serious decisions,” Mr Bagheri Kani tweeted.

Iran has already started making moves in hope of reaching a deal as its officials visited South Korea, one of its former leading Asian customers, to discuss supply deals with refiners.

Analysts noted that if a deal is reached on Iran’s nuclear program, the country could add 500,000 barrels per day to the global oil supply between April and May.

However, if the negotiations fail, oil prices will jump higher, possibly hitting $100 as demand growth continues to outpace production.

Meanwhile, tension over a possible Russian invasion of Ukraine continued to support oil markets because of the potential disruption to energy supplies.

Even as Russia denies planning to invade its neighbour, the US President, Mr Joe Biden said there was every indication Russia planned to invade Ukraine in the next few days and was preparing a pretext to justify it.

Russia had earlier in the week announced partial pullback of troops from near Ukraine but this was countered by Western governments warning that Kremlin was misleading observers but was instead building up military presence near its neighbour’s border.