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The oil market continues to decline after a loud collapse the day before


On Friday, oil prices are showing a steady decline. Market participants fear an increase in the supply of raw materials from Iran amid statements by the United States to lift sanctions on some individuals and companies trading in Iranian oil. Thus, the cost of August futures for North Sea Brent blend dipped by 0.37% – to $ 72.25 per barrel, while July contracts for WTI blend lost 0.34%, dropping to $ 70.05 per barrel. At the moment, the black gold market is under pressure from negative dynamics. Its participants are concerned about a possible increase in the supply of raw materials from Iran in connection with the recent statement by the US Treasury Department on the lifting of sanctions on three individuals and two companies associated with the Iranian oil trade. The result of such a decision in the future may be a deal to lift the embargo against one of the main suppliers of OPEC and return to the sale of Iranian raw materials. Despite the fact that the lifting of sanctions on senior officials was an encouraging factor and some progress for Tehran, the real future of negotiations in the Austrian capital remains rather blurred. Thus, many experts believe that the actions of the United States were of a routine nature and were not directly related to the Iranian issue of the nuclear deal. Today, America still maintains sanctions on Iran’s oil sector. Recall that in 2018, at that time, the current President of the United States, Donald Trump, withdrew from the international agreement on limiting the Iranian nuclear program and returned sanctions on raw materials from Iran. This year, President Joe Biden’s team resumed negotiations with Tehran, and in mid-May the process of preparing the Iranian oil industry for the lifting of sanctions began. According to the optimistic scenarios of analysts, in the next few months Iran may return to pre-sanctioned volumes of black gold production in the region of 4 million barrels per day. In the past month, this figure was at the level of 2.5 million barrels per day. In addition, in the focus of increased attention of investors – the expectation of the Friday report of the International Energy Agency. Participants in the oil market hope to find information on further prospects for the recovery in demand for black gold among the fresh data. The day before, on Thursday, the oil market experienced a sharp collapse of quotations following the news of the lifting of sanctions against several key officials of the Iranian oil industry. Around 19:00 Moscow time, the price of black gold began to sink instantly and in just a few minutes of trading fell by 2.2% (about $ 1.5). Later, the price level began to recover and returned to the previous levels in about two hours. – Source: InstaForex

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