Oil Falls as US, Iran Pledge to Continue Nuclear Talks

Oil price went down on Monday after the United States and Iran said they would continue discussions about Iran’s nuclear program. This reduced worries about a possible war in the Middle East, which could disrupt oil supplies from the region.

Brent crude oil futures fell by 49 cents, or 0.72%, to $67.56 per barrel by 01:34 GMT. This decline followed a 50-cent price increase on Friday. While U.S. West Texas Intermediate (WTI) crude dropped by 42 cents, or 0.66%, to $63.13 per barrel, following a 26-cent increase at the previous trading session.

Oil prices have weakened at the start of the week as markets reacted positively to the U.S.-Iran talks held in Oman. IG market analyst Tony Sycamore said the oil market is feeling relieved because the discussions were constructive. He explained that with more talks expected, fears of immediate supply disruptions in the Middle East have reduced significantly.

Both Iran and the United States described the indirect nuclear talks as positive, although disagreements remain. This helped calm concerns that failed negotiations could push the region closer to war, especially since the U.S. has increased its military presence in the area.

Investors remain concerned that any conflict could disrupt oil shipments through the Strait of Hormuz, a pass through between Oman and Iran. Around one-fifth of the world’s total oil consumption moves through this narrow passage.

Following the easing of tensions, Brent and WTI prices fell by more than 2% last week, marking their first weekly decline in seven weeks. However, risks still exist. Iran’s foreign minister warned that Iran would attack U.S. military bases in the Middle East if it were attacked, showing tensions are not fully resolved.

ALSO READ-Vietnam-US Trade Surplus Rises As China Imports Peak

Meanwhile, Europe is making efforts to reduce Russia’s oil earnings linked to the war in Ukraine. The European Commission proposed banning services that support Russia’s seaborne oil exports. In addition, Indian refineries are avoiding purchases of Russian oil.

Share this article Latest News Categories More News