By Akanimo Sampson
Uncertainties in Iran and United States nuclear talk deals sparked increase in crude oil prices of various categories on Monday.
The hike in prices is already fueling fears that supply may outpace demand if sanction on Iranian crude is lifted.
An obstacle in negotiations between Iran and the US on reviving the 2015 nuclear deal and lifting Iranian oil export sanctions has now delayed extra volumes of Iranian crude hitting a pandemic-hit global oil market.
For fear of supply glut, oil prices fell 3% last week after Iran’s president, Hassan Rouhani, said the United States was ready to lift sanctions on his country’s oil, banking and shipping sectors.
Consequently, the international benchmark Brent crude traded at $67.30 per barrel after a 1.43% increase compared with the closing price on Friday at $66.35 a barrel.
Also, the American benchmark West Texas Intermediate (WTI) was at $64.46 per barrel at the same time, jumped 1.86% after it ended the previous session at $63.28 a barrel.
Oil analysts explained that oil lost some gains last week due to market jitters over the return of Iranian supplies to an already volatile market severely hit by the COVID-19 pandemic.
Prices began to rebound when negotiations to revive the 2015 nuclear deal between Iran and world powers hit a stumbling block following the announcement on Saturday by the country’s parliament speaker on the expiry of a three-month monitoring deal between Tehran and the UN nuclear watchdog.
On Sunday, Iran’s Parliament Speaker Baqer Qalibaf said the International Atomic Energy Agency (IAEA) will “no longer be able to access images of the Iranian nuclear sites.”
“From May 22 and with the end of the three-month agreement, the agency will have no access to data collected by cameras inside the nuclear facilities agreed under the agreement, and cannot transfer them”, Qalibaf told the parliament.
He said the law passed by the parliament will be implemented to reduce Iran’s commitments under the Iran nuclear deal.
In the mean time, Iranian President Hassan Rouhani recalled on Sunday that considering the recent round of talks in Vienna, the US has explicitly expressed readiness to lift sanctions on Iran in line with the Joint Comprehensive Plan of Action.
“Iran will proceed with the negotiations on the revival of the 2015 nuclear deal until reaching a final agreement”, Rouhani said.
Experts say that Iran has increased its oil production in recent months on the expectation that sanctions will be lifted.
Cheap dollar encourages investors
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, fell 0.12% to 89.91 earlier Monday.
The decline in the value of the greenback is encouraging oil-importing countries to purchase more crude oil at cheaper dollar prices, which in turn is supporting higher crude prices.
