Oil prices are declining amid references to the progress of Iran’s negotiations

Oil prices fell for the second day after US President Donald Trump said that the United States and Iran are close to reaching an agreement on Tehran’s nuclear program, a move that may lead to adding more supplies to a market that quickly approaches a sculpture in the supply.

The price of Brent crude decreased by more than 2% to be leveled below $ 65 a barrel. The prices of American crude futures declined.

Analysts expect that the global crude market will receive a flood from the supply if all the sanctions imposed on Iran are lifted. These developments increase the pressure on the market, which is already witnessing additional supplies after the “OPEC+” production alliance increased at a faster pace than expected, and commercial talks between the United States and the main consuming countries cast a shadow over demand expectations.

Iranian oil supplies
“Trump wants to reach an agreement with Iran at a time when he continues his efforts to reduce oil prices. Speculation is directed towards reaching an agreement closer this year.”

Duvidi expects the agreement to enhance oil supplies with between 200 thousand and 300 thousand barrels per day. Adding that Iranian oil exports have already grown, reaching about 1.7 million barrels per day in April.

Although Trump told reporters in Doha that the agreement became soon, his last tone was more optimistic than Iran, as the Iranian chief negotiator, Foreign Minister Abbas Araqji, urged the United States on Wednesday to solve a “more realistic” approach in the next round of talks in which Oman mediates. It has not settled and places the place of it yet.

Constantly
“In less than 24 hours, the trend from the United States imposed new sanctions on Iran, to increasing speculation that achieving a diplomatic achievement may be within reach,” said Arn Luman Rasmussen, Senior Analyst at the company “A/S Global Resicc Management”.

He added, “If an agreement is reached, this would increase the possibility of a large surplus in the supply later this year, especially when this is associated with the planning for the planned production planned by (OPEC+).”

The average price of Brent crude has reached about $ 63 a barrel so far this month, which is the lowest price since 2021. This decline will help calm inflationary pressures in the consuming economies, but it negatively affects the returns of the main producers.

American shale oil companies have already started to reduce capital spending plans, and Saudi Arabia has also raised borrowing levels in light of the appearance of signs on the impact of low prices.

Pressure on oil prices
Negative morale increased after the International Energy Agency expected to slow global consumption growth during the rest of the year, with the imposition of commercial uncertainty at demand.

“We see clear signs of slowing the global economy and slowing the growth of oil demand,” Torryl Bosouni, head of the Oil Markets Department at the International Energy Agency, said in an interview with Bloomberg TV with Frances Lacoa.

Oil prices touched their lowest levels in the four years during the peak of commercial turmoil before achieving its most powerful rise in four days since October after announcing the truce this week.

Oil prices are still low 14% this year affected by the inaccuracy of commercial, and the fastest production increases expected by the Organization of Petroleum Exporting Countries and its allies.