Oil eyes potential conclusion of U.S.-Iran talks

Published On: February 7, 2022Categories: Alternative Investments1.3 min read

If the United States lifts sanctions on Iran, the country could boost oil shipments, adding to global supply

New signals that talks between the U.S. and Iranian officials may be nearing a conclusion could take steam out of the oil rally, traders said, after U.S. and Brent crude reach multi-year highs on Friday.

Anticipation that Washington and Tehran have made progress on reviving a deal restricting the OPEC country’s nuclear weapons development would boost crude supply.

If the United States lifts sanctions on Iran, the country could boost oil shipments, adding to global supply.

On Friday, Brent crude advanced $2.16, or 2.4%, to settle at $93.27 a barrel having earlier reached its highest since October 2014 at $93.70.

U.S. West Texas Intermediate (WTI) crude finished $2.04, or 2.3%, higher at $92.31 a barrel after trading as high as $93.17, its highest since September 2014.

There has been speculation that this rally was going to encourage some sanctions relief and get more Iranian oil on the market, said John Kilduff, partner at Again Capital LLC in New York.

On Friday, the United States restored sanctions waivers allowing international nuclear cooperation with Iran on projects designed to make it harder for Iran’s nuclear sites to be used to develop weapons.

Another senior State Department official on Friday said the waiver was needed to permit technical discussions about reviving the deal but was not a signal that the United States was on the verge of reaching an agreement on its restoration.

Speaking on condition of anonymity, a European official said top envoys to the Vienna talks – which are indirect because Iran has so far refused to sit down with U.S. diplomats – were likely to meet on Tuesday in the Austrian capital.

About the Author: Jonathan Adams

Latest articles

Go to Top