Iran's nuclear talks with the US send oil prices tumbling
Oil prices in New York are falling for the second consecutive day. Brokers believe that announcements coming from Tehran are having an impact. Specifically, Iran is ready for a nuclear agreement with the United States, which could lead to the easing of sanctions on the Islamic Republic.
Oil prices on the New York exchange are dropping significantly. Iran's signals indicate an openness to a nuclear agreement with the US, which could increase the supply of the commodity worldwide.
A barrel of West Texas Intermediate oil for June delivery costs CAD 82.35, representing a decrease of 2.63 percent. Meanwhile, Brent crude for July is priced at CAD 86.27 per barrel, reflecting a decline of 2.56 percent.
What exactly led to the change? During his visit to the Middle East, US President Donald Trump expressed his readiness to reach a nuclear agreement with Iran. However, he warned that the offer would not be available forever. If rejected, he added, the US could exert immense pressure, leading to a complete halt of Iranian oil exports.
Trump also emphasized that Iran must stop supporting terrorism and pursuing nuclear weapons.
In response to these declarations, Iran expressed readiness to sign an agreement under certain conditions. Ali Shamkhani, former secretary of the National Defense Council of the Islamic Republic of Iran, stated that Iran could commit to not possessing nuclear weapons in exchange for the easing of sanctions.
Perspectives on the oil market
Zhou Mi, an oil market analyst, notes that oil prices have been trending downward for the past two days. Increased oil deliveries by OPEC+ countries and geopolitical easing between the US and Iran improve the commodity supply outlook.
On the other hand, a ceasefire in the US-China trade war and the reduction of tariffs could increase crude demand. Recently, there was a series of four days of rising oil prices in New York. However, Zhou Mi assesses that changes in US customs policy may only temporarily impact the oil demand.
The International Energy Agency (IEA) will publish its latest estimates on global oil supply and demand on Thursday.
