Oil Prices Plummet on US-Iran Nuclear Deal Speculations

Global oil prices took a significant hit recently, with Brent crude falling over 2% to settle below $65 and US crude futures sliding 2.4% to $61.62 per barrel. This sharp decline is largely attributed to speculation surrounding a potential breakthrough in US-Iran nuclear negotiations.

If a deal is reached, it could lead to the easing of economic sanctions on Iran, allowing the country to increase its oil exports and potentially flooding the market with more crude. This would put pressure on global oil prices, which are already fragile. According to Russ Mould, investment director at AJ Bell, “This is a classic case of supply expectations driving market behaviour.” He adds that if sanctions are lifted, the additional oil could weigh heavily on the price environment .The broader market landscape reflects this nervousness, with:
Seeing modest declines globally, with Wall Street starting the session on a negative note.
Remaining under pressure due to confusion over trade policy and tariffs.
Walmart’s shares dropped nearly 5% after its first-quarter revenue fell short of analyst forecasts, despite profit figures surpassing expectations.The potential US-Iran deal comes with uncertainties, including:
Despite sanctions, Iran has managed to export around 1.5-1.6 million barrels per day, mostly to China.
If sanctions are lifted, Iran’s oil exports could increase by up to 1 million barrels per day within a few months.
This could lead to a surge in global oil supply, further pressuring oil prices.

The outcome of the US-Iran negotiations will significantly impact the global oil market, and traders are closely watching the developments ¹.