Oil prices fell as Iran sees a broad outline to end sanctions that the U.S. reimposed after the Trump administration withdrew from the nuclear deal in 2018, potentially allowing more crude on global markets.
President Hassan Rouhani expressed optimism that oil, shipping, insurance and central bank sanctions will be lifted, according to comments from state television Thursday.
The comments came as Iran and Western powers engage in talks to revive the Joint Comprehensive Plan of Action (JCPOA), which put limits on Iran’s nuclear program in return for relief on economic sanctions, such as oil sales.
Trump withdrew from the agreement, which was signed in 2015 and put into effect in 2016, saying it failed to stop Iran’s nuclear weapon ambitions. President Joe Biden has vowed to renew the deal with a “longer, stronger” agreement.
Enrique Mora, the EU diplomat in charge of facilitating the nuclear talks, said he expects a return to the nuclear deal before Iran’s presidential elections on June 18, Bloomberg reported. The U.S. State Department said talks will resume next week.
Oil Prices Fall
The positive breakthrough in talks sent oil prices lower. Brent fell 1.1% to $65.95 per barrel. U.S. crude was down 0.9% to $62.78.
In a report out Monday, S&P Global Platts said it continued to assume that “Iran and the US will reach a framework nuclear deal in May, with full relief of oil sanctions by September.”
CFRA Research has estimated that a renewed nuclear deal could bring back an incremental 2 million barrels of oil per day to the world market.
The nuclear talks come as oil prices had picked up amid rising Covid-19 vaccination rates in the U.S., U.K. and Europe and the start of the summer travel season.
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