As bans on Iranian oil exports will be lifted, it is expected to have some impact on the oil prices which are already low. In fact, according to some estimates Brent crude may slip below $100 a barrel for the first time since June. Market observers before the negotiations had expected that if talks were successful and sanctions lifted, there would be a further fall in the oil prices.
Some estimates also say that even limited detente between the U.S. and Iran, the country which has the world’s fourth-largest proven oil reserves, may have an impact on oil prices. According to Zarif, the Iranian foreign minister, the agreement should mute the threats of war that have weighed over his country’s nuclear work.
Though he called the tussle between the west and Iran unnecessary, impractical and illegal, the critics know that how it can endanger Israel’s security. Now that Iran and world powers have struck an accord which is going to broker peace between the U.S. and Iran and shun the bigotry that they have for each other since 1979, it should indicate a positive development for oil market.
There won’t be Any Respite for Iranian Oil Importers, Says the U.S. Fact Sheet
However, estimates tell that there won’t be any respite for oil prices, particularly for India. Several reports tell that the prices won’t go down for the simple reason that according to a U.S. fact sheet which also said Tehran would get a relief of $7 billion under the agreement, countries like India would have to continue reducing oil imports from Iran.
The U.S. Fact sheet also clears that despite a deal with the world powers over its controversial nuclear program where it Iran would get a relief of $7 billion under the agreement, there is no respite as the sanctions affecting crude oil sales will continue to impose pressure on Iran’s government. From the onset, it looks it is not a good deal for Iranian oil importers like India.
Nonetheless, the U.S. Fact sheet also clears that working with international partners; the country has cut Iran’s oil sales from 2.5 million barrels per day (bpd) in early 2012 to 1 million bpd today. Thus, the U.S. has denied Iran the ability to sell almost 1.5 million bpd. The report boasts that Iran has lost more than $80 billion since the beginning of 2012 from the sanctions.