Iran agreed yesterday to curtail nuclear activities in return for easing of some sanctions on oil, auto parts, gold and precious metals. The first major crack in a decade-long deadlock.
Iran and the world powers reached a preliminary accord on the country’s nuclear program that will ease economic sanctions while keeping a cap on oil sales.
The deal is reversible. It was announced today after five days of talks in Geneva. It releases some of Iran’s oil assets and allows it to keep exporting crude at current levels.
Crude oil headed for the biggest drop since Nov. 1, after Iran reached an accord to ease sanctions on its oil exports. The euro fell from a three-week high as gold slid to the lowest since July.
We can expect some price weakness as the market adjusts to the future prospect that Iranian exports will resume. The accord may put “downward pressure” on oil prices because it will let Iran raise exports by nearly 300,000 barrels a day from last month’s level.
Crude oil led energy prices – from gasoline to heating oil – lower.