Crude oil prices reportedly dropped on regional media reports. As per updates, these reports ignited speculations that the United States (US) and Iran are on the path of igniting a nuclear deal.
According to a Bloomberg report, the media reports raised speculations on a deal that would open new ways for more Iranian exports. However, US officials refuted any such reports, as per the publication.
Based on the reaction to these media reports, West Texas Intermediate reportedly fell as much as 4.8 per cent before settling near $71 a barrel. As per Bloomberg, several regional media like Israel’s Haaretz said that Iran and the US have made progress over the Islamic Republic’s nuclear program.
It adds that any agreement to restore the 2015 nuclear deal, one that the Donald Trump administration voided, would likely involve the United States waiving sanctions on purchase of Iranian oil. This would also potentially trigger a flood of exports.
“Any reports of an interim deal are false,” Bloomberg quoted State Department spokesman Vedant Patel as saying.
The publication also explains that Iran could restore about 1 million barrels of daily crude production within months of a deal. If it sails through, the country could be back to full capacity of about 3.7 million barrels a day by next year.
This year, crude oil prices have also been under the scanner as slow economic recovery, interest rate hikes from the Federal Reserve and Russian crude flows weigh on prices, it added.