Brent slips as progress in US–Iran talks eases market jitters

The front-month ICE Brent contract has declined by $0.33/bbl on the day, to trade at $67.61/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent’s price has held its ground after the US army seized another Venezuela-linked oil tanker allegedly carrying sanctioned oil.

The US Department of War (DoW) said in a statement that the Panamanian-flagged oil tanker Veronica III was seized in the Indian Ocean.

The move marks the second such incident in a week, according to Price Future Group’s senior market analyst Phil Flynn.

“Tracked all the way from the Caribbean, the vessel [Veronica III] was carrying nearly 2 million barrels [bbls] of crude and fuel oil linked to sanctioned Venezuelan networks,” Flynn said.

The US government has said it will continue its efforts to crack down on Venezuelan and Iranian oil trade, which the Donald Trump-led administration has deemed illicit.

Downward pressure:

Brent’s price has moved lower amid signs of a breakthrough in US-Iran nuclear negotiations, held in Geneva yesterday.

Washington and Tehran have reached an understanding on “guiding principles” aimed at discussing the latter’s nuclear enrichment programme, Reuters reported citing Iran’s Foreign Minister Abbas Araqchi.

Meanwhile, a representative from Washington said that Iran will submit a detailed proposal in the coming two weeks, in a step to take yesterday's discussions forward, Reuters reported.

However, it is important to note that yesterday’s discussions don’t mean that a final deal has been cracked between the two countries.

“The decline [in Brent’s price] was largely driven by reports that Iran has reached a “general agreement” with the US on the terms of a potential deal,” two analysts from ING Bank noted.

By Aparupa Mazumder

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