Global oil prices tumbled Monday after the weekend’s historic deal to curb Iran's nuclear program Iran — but will it last?
Under the deal, Iran gets an easing in many international sanctions in exchange for a six month freeze on its uranium enrichment. Following the news, Brent crude fell about 2 percent. (Via CNN)
Iran is home to the world's fourth-largest oil reserves — but oil sales have plunged by about 60 percent since 2012 when tough international sanctions were put into place. That amounts to about $80 billion in lost revenue for the country. (Via ITN)
It’s worth noting, sanctions on oil and banking remain for the time being, and the deal also doesn’t open the door to for Western energy investors to do business in Iran. (Via CBS)
But Iran will gain access to more than $4 billion in oil revenue frozen in foreign banks. With that, some analysts say to expect the immediate decline in oil pricing to continue in the short term.
“I think we will get a bit of a knee jerk-reaction [to the deal] but I still think that oil will continue to trade lower for some time... the Middle Eastern premium is eroding quite fast.” (Via CNBC)
The Wall Street Journal reports analysts at JBC Energy Markets cautioned against counting on further price declines, writing: "as the agreement should be seen as more of a symbolic measure hinting towards a potential long-term solution rather than a short term fix on the fundamental side."
Despite the weekend agreement, a bipartisan group of U.S. senators is looking impose a new round of sanctions against Iran.
