Ahead of Iran Nuclear Deal Talks, International Oil Prices Plunge... WTI Down 4.6%

If Iran Sanctions Are Lifted, 3 Million Barrel Increase Expected
US State Department Says "No Immediate Breakthrough Expected" to Set Boundaries

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] International oil prices plunged more than 4% a day before the Iran nuclear deal (JCPOA) talks. This is based on expectations that the U.S. will significantly ease sanctions on Iran during the talks, allowing Iranian oil, currently under embargo, to be widely distributed in the second half of this year. However, the U.S. government anticipates that the talks will be difficult, and Iran has stated it does not intend to hold separate talks with the U.S., leading to a war of nerves between the two sides. As a result, there are mixed forecasts that sanctions will not be eased immediately as the market expects.

On the 5th (local time), West Texas Intermediate (WTI) crude oil prices closed at $58.65 per barrel, down $2.80 (4.6%) from the previous session at the New York Mercantile Exchange (NYMEX). Brent crude oil prices on the London ICE Futures Exchange also fell $3.08 (4.8%) to $61.78 per barrel. On this day, international oil prices sharply declined ahead of the Iran nuclear deal talks amid expectations that the U.S. might significantly ease sanctions on Iran.

Market experts mainly analyzed that if U.S. sanctions on Iran are eased, Iran's oil supply will increase. According to CNBC, Warren Patterson, a commodity strategist at ING, stated in a report on the day, "There is a possibility that U.S. sanctions on Iran will be lifted, and if so, Iran could increase its oil exports," adding, "Iran's supply is already increasing, and by the fourth quarter of this year, daily supply could reach 3 million barrels."

However, the U.S. State Department dismissed the possibility of early sanction relief, saying the Iran nuclear deal talks will not be easy. Ned Price, spokesperson for the U.S. State Department, said at a regular briefing, "The discussions will be more difficult than expected," and "We do not expect an immediate breakthrough." Currently, the U.S. and Iran are negotiating the restoration of the nuclear deal, with the U.S. demanding that Iran first halt uranium enrichment, while Iran demands that the U.S. first lift sanctions on Iran.

Iranian Foreign Minister Javad Zarif also stated on the 2nd that "Although talks with the six parties to the Iran nuclear deal are scheduled to be held in Vienna, there will be no meeting between Iran and the U.S.," indicating that the talks are unlikely to yield significant results and continuing the war of nerves. Iran continues to insist that the U.S. must lift sanctions first before serious nuclear deal negotiations can begin.

This content was produced with the assistance of AI translation services.