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/