Home Business News US/Iran rift triggers slight crash in oil prices

US/Iran rift triggers slight crash in oil prices



After a long steady bounce-back in global oil prices, market forces are beginning to react to an impending US snub of Iran’s nuclear programme as oil prices have crashed 0.8 per cent, selling $75.54 low from the initial $76.17 recorded in the last few weeks.

Market surveys indicate that the United States of America’s West Texas Intermediate (WTI) crude has dropped 73 cents, or 1 percent, to $70 a barrel, after settling above that level for the first time since November 2014 on Monday.

Also, Brent Crude futures were down 63 Cents, or 0.8 percent, at $75.54, having jumped 1.7 percent to settle at $76.17 a barrel in the previous weeks.

With the changing trend being triggered, investors may be jittery over a possible re-imposition of sanctions on the Persian Arabian Gulf oil giant, Iran, following renewed talks on its nuclear agreement it had with the former U.S. President, Barack Obama.

According to a report published by the Barclays Research Analysts, the current U.S. President, Donald Trump had said on Monday that a decision on whether to remain in the Iran nuclear deal or to impose sanctions would be announced at 2:00 p.m. EDT (1800 GMT) on Tuesday, four days earlier than expected.

The report states : “Trump is likely to either announce he will not be renewing a waiver on sanctions, leading to a significant reduction in Iranian oil sales within six months, or will restate his opposition to the nuclear agreement.”

“Regardless, his foreign policy continues to ignite tensions in the main oil-exporting centre and is, thus, price supportive,” it added.

The implication, however, is that if the U.S. president decides to re-impose sanctions against Iran eventually, he must wait at least 180 days before imposing far-reaching measure, which may target banks of nations that fail to significantly cut their purchases of Iranian oil.

Should this happen, there are indications that the Iranian crude exports could be hit, which could trigger yet another glut in the oil market after just a short period of balance and resurgence in oil prices.

Even though Iranian industry analysts are optimistic that the country’s oil industry would continue to develop even if the United States exits the accord, according to the report, there are indications that the nation’s exports could be cut by 200,000 to 300,000 bpd as a result.