Global oil prices pulled back from their record highs on Monday as concerns over tight supplies wane on the back of continuous progress in the U.S-Iran nuclear talks.
Donald Trump’s administration had canceled the nuclear deal that took six world’s leading nations twelve years to sign with Iran, claiming it was a poor deal that gave the middle east nation too much power, Investors King reported in 2018. He blamed the Obama administration for the poor deal and proceeded to cancel it despite global outcry.
Biden administration has now restored sanctions waiver to Iran and commenced discussion on US concerns about the old deal and how it can be amended to suit the two nations, said a senior State Department official.
The ongoing talks, if materalised, will increase global crude oil supply as Iran could ramp up production to about 4 million barrels per day.
“The lifting of some sanctions can, in the true sense of the word, translate into their goodwill. Americans talk about it, but it should be known that what happens on paper is good but not enough,” Iranian Foreign Minister Hossein Amirabdollahian said, quoted by ISNA news agency.
Brent crude oil, against which Nigerian oil is priced, fell by 1 percent to $92.31 per barrel at 12:pm Nigerian time on Monday after rising to $94 last week, its highest since October 2014. U.S. West Texas Intermediate declined by 1.4 percent to $91 a barrel.
Global investors, however, do not expect US-Iran to reach an agreement anytime soon. In fact, they are brazing up for market volatility amid uncertainty ahead.
“Investors expect more twists and turns in the U.S.-Iranian talks and no agreement to be reached anytime soon,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.
Commerzbank analyst Carsten Fritsch said: “If the oil sanctions were also to be relaxed, this could help ease the oil market.”