Oil prices experienced a decline on Thursday amidst speculations that the United States and Iran could be nearing a resolution regarding Tehran’s nuclear program. Brent crude futures for July delivery dropped by 2.36% to settle at $64.53 per barrel, while U.S. West Texas Intermediate futures closed at $61.62, down 2.42% for the session.
During his visit to Doha, Qatar, U.S. President Donald Trump hinted at progress in negotiations with Iran, stating, “We’re in very serious negotiations with Iran for long-term peace.” This comes in the wake of a senior advisor to Iran’s supreme leader indicating readiness to sign a nuclear deal under certain conditions in exchange for the removal of economic sanctions.
The potential U.S.-Iran nuclear agreement could have significant implications for the oil market. Analysts suggest that if a deal is reached and enforced, Iran’s crude oil exports could increase by up to 1 million barrels per day. Despite this, the impact might be offset by OPEC+ scaling back its plans to release oil back into the market faster than initially planned.
OPEC and its allies, known as OPEC+, have surprised markets by boosting oil supply in recent months. Led by Saudi Arabia, the group agreed to raise output by 411,000 barrels per day in June, following a similar increase in May.
Iran’s economy has faced severe challenges since the U.S. withdrawal from the Iran nuclear deal in 2018. The country has grappled with protests, currency devaluation, and a cost-of-living crisis, compounded by the collapse of its main ally in the Middle East and setbacks in Lebanon. Despite Ayatollah Ali Khamenei’s previous opposition to negotiations with the U.S., there has been a reported shift in strategy within the Iranian government to advocate for talks as vital for the regime’s survival.
As the dynamics between the U.S. and Iran evolve, the global oil market remains on edge, awaiting further developments in the diplomatic negotiations. The outcome of these discussions could have far-reaching consequences for oil prices and global energy security. Stay tuned for more updates on this developing story.