Iran's nuclear talks shake oil prices as New York sees dip

Oil prices on the New York exchange are dropping significantly due to signals from Iran indicating openness to a nuclear agreement with the USA, which could increase the global supply of the commodity.

A barrel of West Texas Intermediate oil for June delivery is currently priced at $61.49, representing a decrease of 2.63 percent. Meanwhile, Brent crude for July is priced at $64.40 per barrel, reflecting a decrease of 2.56 percent.

What exactly led to this change? U.S. President Donald Trump, during his visit to the Middle East, expressed his willingness to reach a nuclear agreement with Iran. However, he warned that the offer will not be available indefinitely. If Iran rejects the proposal, he added, the U.S. may apply immense pressure, possibly leading to a complete halt of Iranian oil exports.

Trump also emphasized that Iran must cease supporting terrorism and pursuing nuclear weapons.

In response to these declarations, Iran expressed readiness to sign an agreement under certain conditions. Ali Shamkhani, former secretary of the National Defense Council of the Islamic Republic of Iran, stated that Iran could commit to not possessing nuclear weapons in exchange for the easing of sanctions.

Zhou Mi, an oil market analyst, notes that oil prices have been following a downward trend for the past two days. Increased oil deliveries by OPEC+ countries and geopolitical easing between the U.S. and Iran improve the commodity supply outlook.

On the other hand, a ceasefire in the U.S.-China trade war and the reduction of tariffs could lead to an increase in crude demand. Recently, there was a series of four days of rising oil prices in New York. However, Zhou Mi assesses that changes in U.S. customs policy may only temporarily impact the demand for oil.

On Thursday, the International Energy Agency (IEA) will publish its latest estimates on global oil supply and demand.