The global oil market has seen a slight relief as prices leaped about 1 per cent,on Tuesday, July 14, reversing early losses.
This relief came after it became apparent that a nuclear deal between Tehran and six global powers will not immediately remove sanctions placed on Iranian crude exports.
Under the deal, sanctions imposed by the United States, European Union and United Nations are expected to be lifted in exchange for curbs on Iran’s nuclear programme. But analysts said the sanctions would not be lifted right away.
Sanctions have almost halved Iranian oil exports, to just over 1 million barrels per day. The global market, meanwhile, is oversupplied by about 2.5 million bpd.
Chief oil analyst at London-based consultancy, Energy Aspects,Amrita Sen, said: “Oil from Iran will take time to return, and will not be before next year, most likely the second half of 2016.”
A Reuters survey expected Tehran to raise exports by 60 per cent within a year.
Benchmark Brent crude futures were up 55 cents, or nearly 1 per cent, at $58.40 a barrel by late afternoon yesterday. It initially plummeted to a low of $56.43 earlier, after news of the Iran nuclear deal.
US crude futures were up 75 cents, or 1.4 per cent, at $53.25 after declining earlier to $50.38.
