Oil dips as US-Iran trade talks progress

Brent crude’s price declined after US President Donald Trump said that Washington and Iran were very close to signing a nuclear agreement.

IMAGE: Oil pump jacks with Iran's flag in the background during dusk. Getty Images

Tehran has “sort of” agreed to the terms, Trump said during the press brief on Thursday. “We're in very serious negotiations with Iran for long-term peace,” the AFP quoted Trump as saying.

The remarks came during a press brief in Doha, Qatar, during the US President’s diplomatic visit to the UAE.

If finalised, the deal would require Iran to halt all nuclear activities in exchange for the US lifting sanctions on Iranian oil and energy infrastructure. “Oil sold off yesterday amid rising hopes for an Iranian nuclear deal after comments from President Trump,” two analysts from ING Bank said.

The move could add more Iranian crude to an already saturated global oil market and push prices lower, according to market analysts. If the two countries reach an agreement, Iran could ramp up oil production by 400,000 b/d, “with more willing buyers for its oil,” ING Bank’s analysts projected.

However, there were still gaps to bridge in the negotiations, Reuters reported citing an Iranian source familiar with the matter. The market is currently “awaiting news on a potential US-Iran nuclear deal,” VANDA Insights’ founder and analyst Vandana Hari remarked.

By Aparupa Mazumder

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