Oil prices fell on July 14
after diplomats declared that world powers and Tehran had struck a landmark
deal to curb Iran’s nuclear programme in exchange for billions of dollars in
relief from international sanctions. The end of sanctions means new investments
in Iran’s oil production and more oil coming into the market at a time when it
is already "massively oversupplied”, according to the Paris-based
International Energy Agency (IEA).
Brent crude and West Texas Intermediate,
or WTI, oil futures initially tumbled as much as 2% in early trading before
paring losses later in the day. Brent was trading up 0.3% at $58.09 a barrel
after dropping as low as $56.43. WTI fell as low $50.88 a barrel after
recovering and rising 0.9% to $52.73.
The gradual end to
sanctions foreseen under the deal will allow Iran to attract investment into
its energy sector. European oil majors such as Royal Dutch Shell and Italy’s
ENI have reportedly already visited Tehran, with a view to clearing old debts
and paving the way for new deals.
Iran wants to increase its
oil output to 5 million barrels a day by the end of the decade. Iran has the
world’s fourth largest oil reserves with about 157,530 million barrels, or 10%
of the world’s proven oil stores, according to the Organization of the
Petroleum Exporting Countries (OPEC).
Oil exports from
OPEC-member Iran have fallen in half since 2012 to about 1 million barrels a
day.
http
://www
.neurope
.eu
/article
/iran
-nuke
-deal
-opens
-door
-for
-lower
-oil
-prices
/