Although US crude reached $70.73 a barrel, it decreased below $70 in electronic trading, following President Donald Trump’s statement that he would announce his decision on Iran nuclear deal on Tuesday. It is reported that the oil prices have been rising because of anticipation that Donald Trump will abandon the 2015 Iran nuclear deal.The experts are of the opinion that the recent rise in prices may be an indication that the markets are assuming there will be disruption to Iran’s exports. Prices have increased from strong global demand and supply cuts by OPEC (Organization of the Petroleum Exporting Countries) and Russia, experts further mentioned.
It is estimated that approximately 1 million barrels per day of crude supply may be affected by reinstating sanctions on Iran. Although the rise of oil prices and its direct impacts could affect oil markets, it may be very limited since investors have already started to get ready to deal with it, experts said.
However, experts believe that it may not be as harsh as the multinational sanctions imposed on Iran in 2012, since the members of the European Union are urging Donald Trump not to abandon the Iranian deal. Besides, China, a significant oil importer, could also resist. As per the experts, however, American allies such as India, Japan and South Korea, might decide to quit importing oil from Iran.
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