By Adedapo Adesanya
The oil market settled lower on Monday following signs of progress in nuclear talks between the United States and Iran, which could lead to the removal of US sanctions on Iranian oil sales.
At the session, the price of the Brent crude went down by 16 cents or 0.17 per cent to $91.53 per barrel, while the US West Texas Intermediate (WTI) crude fell by 4 cents or 0.4 per cent to $91.28 per barrel.
Crude prices last week rallied for the seventh week on ongoing worries about supply disruptions fueled by extreme cold US weather and ongoing political turmoil among major world producers.
However, US President Joe Biden’s administration restored sanctions waivers to Iran to allow international nuclear cooperation projects as talks on the 2015 international nuclear deal enter the final stretch.
Although the sanctions relief will have a limited impact on Iran’s struggling economy, markets viewed the move as a signal both sides were determined to reach a deal.
And then, it was reported that indirect talks could resume since Iran officials have so far refused to sit down with US diplomats.
It was reported that both countries were likely to meet on Tuesday in the Austrian capital of Vienna.
Investors are told to expect more twists and turns in the US-Iranian talks and no agreement may be reached anytime soon.
If US sanctions are lifted, Iran could quickly export millions of barrels of crude and help to drive down higher oil prices.
Despite this, market analysts noted that crude prices, which have already rallied about 20 per cent this year, are likely to surpass $100 per barrel because of strong global demand.
This is happening as the Organisation of the Petroleum Exporting Countries and its influential energy partners known as OPEC+ are struggling to meet production targets.
Earlier this month, the 23-member alliance decided to green-light the return of 400,000 barrels per day for March.
The move, widely expected by energy analysts, marks a continuation of the group’s strategy to gradually reopen the taps.
OPEC+ has faced pressure from top consumers such as the US and India to pump more to reduce prices and aid the economic recovery but the group has resisted calls for speedier increases despite higher oil prices.
On the geopolitical front, tensions remain high in Eastern Europe, with the US saying on Sunday that Russia could invade Ukraine within days or weeks.
It, however, gave a condition that the country could still go the diplomatic route
Dipo Olowookere