Iran nuclear deal’s “fallout” includes oil price drop
In what had to be an expected result all along if talks with Iran turned out to be favorable, oil prices fell earlier today when Iran agreed to curb its nuclear program, leading to the expectation of more oil exports from the country.
Iran struck a deal with six world powers that would, among other things, allow for $7 billion in immediate economic sanction relief. This, of course, comes as the U.S. has estimated that Iran has lost almost $80 billion in oil revenue since the beginning of last year. That’s when the sanctions began for Iran, which controls a little less than 10% of the world’s proven oil reserves.
Iran still won’t be allowed to exceed one million barrels sold per day for the next six months, but that didn’t stop crude oil prices from dropping about 1-2% around the world. In New York, light crude oil was down 75 cents on the day, finishing at just over $94 per barrel.
In London, crude dropped 2% before recovering slightly to $111 per barrel.
Of course, that’s not the only effect that the deal has had. While the U.S. indexes saw no major change, around the world indexes increased from between .3% in Australia all the way up to 1.5% in Japan’s Nikkei. Cheaper energy prices related to a greater supply of worldwide oil are cited as the reasoning for the increases.