The initial agreement formulated on Thursday indicates the Gulf country may resume exports in a few months after negotiations are finalized by the end of June, according to sources from COMMERZ Bank and UBS AG. Overseas consignments from Iran have been decreased 50 percent by sanctions imposed during the middle part of 2012.
Iran’s return to the world oil market hints at crude price recovery which other OPEC members expect within 2015. Minutes after the accord was published, Brent oil dropped to as much as 5.4 percent.
Under this treaty, European Union nations and the US will lift economic restrictions after International Atomic Energy Agency inspectors confirm Iran’s compliance with restraints on its nuclear agenda.
Brent declined by more than ½ from a one year-month high last June due to global oversupply. Oil futures for delivery in May prolonged losses following the announcement of the concord in Lausanne, Switzerland. It ended at $2.15 or $54.95 per barrel at ICE Futures European exchange in London.
Additional price losses could be checked since there is no assurance a final deal will be completed by June 30, according to top officers of BNP Paribas SA.
The structure was settled between Iran and the United States, United Kingdom, Germany, France, Russia, and China. The framework prescribes a timetable for Iran’s enhancement of uranium and confines it one location. It also allows global monitoring during the next 25 years.
Meanwhile, OPEC Secretary-General (Abdalla El-Badri) forecasted that international oil markets will attain a balance within the second half of this year.
Analysts also pointed out Iranian output may increase twofold current existing surplus and push Brent oil back to a 5 and ½ year trough.
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