The oil market was down by about 2 per cent on Thursday on expectations of a US-Iran nuclear deal that could result in sanctions being eased and more barrels released onto the global market.
This brought down the price of Brent by $1.56 or 2.36 per cent to $64.53 a barrel and weakened the US West Texas Intermediate (WTI) crude by $1.53 or 2.42 per cent to $61.62 per barrel.
The President of the United States, Mr Donald Trump, said yesterday that it was getting close to securing a nuclear deal with Iran, which the oil-producing country said it “sort of” agreed to the terms.
Mr Ali Shamkhani, a top political, military, and nuclear adviser to Iran’s Supreme Leader, Mr Ayatollah Ali Khamenei, said the Middle East nation was ready to sign a nuclear deal with the US under certain conditions, including the US lifting the sanctions on Iran.
These comments came hours after the US Treasury slapped additional sanctions on Iran, designating nearly two dozen firms operating in multiple jurisdictions in virtually every aspect of Iran’s illicit international oil trade.
The sanctions target Iranian efforts to domestically manufacture components for ballistic missiles, the US Treasury Department said, following Tuesday’s sanctions on some 20 companies in a network that it said has long sent Iranian oil to China.
Russia’s Vladimir Putin ignored meeting face-to-face with his Ukrainian counterpart, Mr Volodymyr Zelenskiy, in Turkey on Thursday, instead sending a second-tier delegation to planned peace talks, dealing a blow to prospects for a peace breakthrough.
Due to Mr Putin’s absence, Ukraine’s president said his defence minister would head up Ukraine’s team.
If the talks hold, it will be the first direct talks between the sides since March 2022.
This is slim as Mr Trump said there would be no movement without a meeting between himself and Putin.
The International Energy Agency (IEA) lifted its oil demand growth forecast in 2025 to 740,000 barrels per day, up 20,000 barrels per day from the previous report, citing higher economic growth forecasts and lower oil prices supporting consumption.
The IEA said economic headwinds and record sales of electric vehicles are expected to reduce demand growth to 650,000 barrels per day for the remainder of the year, from growth of nearly 1 million barrels per day in the first quarter.
The Organization of the Petroleum Exporting Countries and allied producers, (OPEC+), has been increasing supply, although OPEC on Wednesday trimmed its forecast for growth in oil supply from the U.S. and other producers outside the wider OPEC+ group this year.
Weighing on prices, data from the US Energy Information Administration (EIA) on Wednesday showed crude stockpiles rose by 3.5 million barrels to 441.8 million barrels last week.