Oil prices are down across the board on the morning of 22 August as investors consider the prospects of a deal which would see Iran release more crude oil on the market.
Increased supply from Iran and a drop in demand as economic growth contracts may see prices fall significantly. The price of one barrel of Brent crude has already fallen 1.3% to $95.42. American oil prices equally fell by 1.4% to $89.53.
The new oil deal with Iran hinges on returning to the 2015 Nuclear Deal reached between U.S authorities and Iran. The deal, which was cancelled unilaterally by the Trump administration, seeks to place limits on Iran’s nuclear capabilities in exchange for the lifting of sanctions.
U.S President Joe Biden spoke with the leaders of France, Germany, and the United Kingdom on 21 August about the possibility of renewing the nuclear deal with Iran, which would likely include provisions for the supply of oil.
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After Russia’s invasion of Ukraine in February, oil prices soared across the world. Russia is the world’s largest exporter of oil. In June, the European Union imposed sweeping sanctions against the Russian oil industry, banning around 90% of Russia’s oil exports. This massive hit to supply has affected the price of oil and sent the West scrambling for new sources of oil.
According to a White House press statement, during the recent multilateral discussions, the countries discussed the “ongoing negotiations” over the nuclear deal as well as the “need for additional support from partners in the Middle East.”
The U.S recently called on OPEC nations to increase oil production, which they soundly rejected, demanding that the U.S itself should increase production. In December, OPEC nations agreed to increase production to 400,000 barrels of crude per day. In March, the price of Brent crude exceeded $130, reaching 13-year highs.
