Oil prices fall after Iran nuclear deal

Oil prices dropped below $94 a barrel Monday as Iran reached a deal with six world powers on the country's nuclear program. The agreement dropped oil prices 92 cents to $93.92 in midday trading in New York. 

Hasan Jamali/AP/File
Oil pumps work in the desert oil fields of Sakhir, Bahrain. Oil prices are headed lower after the preliminary nuclear deal between Iran and six world powers, even though it does not loosen sanctions on Iran's oil exports.

The price of oil dropped below $94 a barrel Monday as a deal between Iran and six world powers on the country's nuclear program raised the possibility that sanctions choking Iranian oil exports will be lifted.

Benchmark U.S. crude for January delivery fell 92 cents to $93.92 in midday trading in New York. Brent crude, a benchmark for international oil used by many U.S. refineries, slipped 64 cents to $110.41 a barrel in London.

The preliminary agreement reached in Geneva Sunday between Iran and the U.S., Britain, France, Russia, China and Germany over Iran's nuclear program does not allow Iran to increase oil exports. But by relaxing some financial restrictions the agreement does make it easier for Iran to sell the oil it is permitted to.

It also removes, for now, the threat of further restrictions on Iranian exports and sets up the possibility that a more comprehensive deal will be struck in the coming months.

The diminished threat to global supplies is likely to make crude cheaper in the short term. And if more Iranian oil returns to international markets, the additional supply is likely to make crude less expensive over the longer term.

"With new domestic output capacity coming on line, plus the potential reemergence of Iranian barrels coming onto the global market, the table is set for lower prices over the longer term," energy analyst Stephen Schork said in a market commentary.

For now, analysts expect Iran's oil exports to remain at around 1 million barrels a day, with most of the flow soaked up by Asian countries like China, India and Korea. That is still far below the 2.5 million barrels a day Iran was exporting in 2011, before sanctions began.

"Iran is still a long way from resuming full oil exports, but the prospect is already being priced in the market," analysts noted in the Kilduff Report edited by Michael Fitzpatrick.

In other energy futures trading on Nymex:

— Wholesale gasoline fell 2.5 cents to $2.686 gallon.

— Heating oil fell 1.3 cents to $3.027 a gallon.

— Natural gas was flat at $3.81 per 1,000 cubic feet.

Associated Press writer Pablo Gorondi contributed to this report from Budapest.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Oil prices fall after Iran nuclear deal
Read this article in
QR Code to Subscription page
Start your subscription today