Oil prices fell sharply on Thursday after U.S. President Donald Trump expressed optimism about reaching a new nuclear deal with Iran. Trump, speaking during his Middle East trip in Doha, Qatar, stated that the U.S. was close to securing a long-term peace agreement with Iran through serious negotiations. Trump’s comments followed remarks from a top advisor to Iran’s supreme leader, indicating that the OPEC producer was prepared to sign a nuclear deal under certain conditions in exchange for the lifting of economic sanctions.
The news had a significant impact on oil markets, with international benchmark crude futures for July trading down 3.6% at $63.67 a barrel and U.S. futures decreasing by 4% to $60.64 a barrel. Tamas Varga, an analyst at brokerage PVM, noted that a potential U.S.-Iran nuclear deal could substantially increase Iran’s crude oil exports. “If an agreement is reached, and Iran agrees to halt enriching weapons-grade uranium, then the country’s crude oil exports can rise by as much as 1 million barrels per day,” Varga said.
Oil prices react to Trump comments
However, he added that OPEC+ might adjust its plans to release barrels back into the market more slowly, potentially mitigating the impact. In recent months, OPEC and its allies, known as OPEC+, have surprised markets by raising supply.
Led by Saudi Arabia, the group agreed in early May to increase output by an additional 411,000 barrels per day in June, following a similar increase in May. The current developments come against the backdrop of economic challenges faced by Iran since Trump withdrew the U.S. from the 2015 Iran nuclear deal in 2018. The original agreement, reached during the Obama administration and involving Russia, China, the EU, and the U.K., aimed to monitor and curb Iran’s nuclear activities in exchange for lifting sanctions.
Iran has been under significant economic strain due to U.S. sanctions, coupled with internal protests, a weakened currency, and a cost-of-living crisis. The regime’s need for relief has driven Tehran to consider new negotiations with the U.S.
As the situation continues to unfold, the potential U.S.-Iran nuclear deal remains a major factor in global oil markets and geopolitical relations.