US-Iran nuclear talks help push oil price lower

London — Oil prices fell $1 on Monday as signs of a progress in the US-Iran nuclear talks that could lead to removal of US sanctions on Iranian oil sales offset concerns about the tight supplies.

Brent crude was down 96c, or 1%, at $92.31 by 10.14am GMT, after earlier touching $94.00, its highest level since October 2014.

US West Texas Intermediate crude fell $1.31, or 1.4%, to $91.00 a barrel. It had risen to as high as $92.73 earlier in the session.

US President Joe Biden’s administration on Friday restored sanctions waivers to Iran to allow international nuclear co-operation projects, as the talks on the 2015 international nuclear deal enter the final stretch.

Although the sanctions relief will have limited effects on Iran's struggling economy, they were perceived by the markets as positive signal that both sides are determined to reach a deal.

If the US lifts sanctions on Iran, the country could boost oil shipments, adding to global supply.

“Investors expect more twists and turns in the US-Iranian talks and no agreement to be reached anytime soon,” said Kazuhiko Saito, chief analyst at Fujitomi Securities.

Commerzbank analyst Carsten Fritsch said: “If the oil sanctions were also to be relaxed, this could help ease the oil market.”

Crude prices, which have already rallied about 20% in 2022, are likely to surpass $100 per barrel because of strong global demand, analysts have said.

Oil cartel and allies Opec+ are struggling to meet targets despite pressure from top consumers to raise production more quickly.

Fuelling supply concerns, tensions remain high in Eastern Europe, with White House national security adviser Jake Sullivan saying on Sunday that Russia could invade Ukraine within days or weeks but might still opt for a diplomatic path. 

Reuters