- Oil prices continue to retreat from recent highs as talks over a potential resurrected nuclear deal with Iran and the United States enter their final stages
- A secured deal could add around 1.3 million barrels per day of crude oil to the market, alleviating supply fears spurred by geopolitical tensions around Russia and Ukraine
- On Friday afternoon AEDT, Brent crude futures are down 0.71 per cent to US$92.31 per barrel and West Texas Intermediate (WTI) is down 0.86 per cent to US$90.97 per barrel
- With the potential deal on the horizon, South Korea says it is already holding talks on resuming imports of Iranian crude oil and unfreezing Iranian funds
- Russia continues to shoot down speculation that it plans to invade Ukraine, but US President Joe Biden says there is every indication an attack is imminent
Oil prices have continued to decline on Friday as talks over a potential resurrected nuclear deal with Iran and the United States entered their final stages this week.
A secured deal would limit Tehran’s nuclear activities in accordance with a 2015 agreement between the countries. In return, the US would lift some economic sanctions placed against Iran when former president Donald Trump withdrew from the deal in 2018.
The deal would unlock more crude supplies and bring some relief to the soaring oil prices seen over the past few months.
With White House officials confirming this week the US and Iran were getting closer to locking in a deal, oil prices retreated from their almost decade-long highs.
On Friday afternoon AEDT, Brent crude futures were down 0.71 per cent to US$92.31 (A$128) per barrel and West Texas Intermediate (WTI) was down 0.86 per cent to US$90.97 (A$126) per barrel.
Of course, with the threat of a Russian invasion of Ukraine keeping investors on tenterhooks, the oil market is locked in a tug-of-war between the Iran-US nuclear deal and Eastern European geopolitical tensions.
OANDA market analyst Craig Erlam told Reuters the progressing talks between the US and Iran, which could see around 1.3 million barrels per day of crude oil added to the market, were helping offset the worst of the potential oil price hike from the Russia-Ukraine situation.
“The price could already be in triple-figure territory if not for the nuclear talks between the US and Iran,” Mr Irlam said.
Russia continues to shoot down speculation that it plans to invade Ukraine, but US President Joe Biden said on Thursday there was every indication Russian troops would march across the border in the next few days.
Ukrainian forces and pro-Moscow separatists traded fire in Eastern Ukraine this week, causing alarm for Western countries who have been anticipating an invasion for weeks. President Biden said Russia was preparing a pretext to justify military action.
With the new US-Iran nuclear deal possibly on the horizon, South Korea — which was previously one of Tehran’s leading oil buyers in Asia — said earlier this week it had already begun to hold talks on resuming imports of Iranian crude oil and unfreezing Iranian funds.