Oil prices fall on hopes of US-Iran nuclear deal
Oil prices fell sharply on Thursday as signs of progress in US-Iran nuclear negotiations and an unexpected rise in US crude inventories raised concerns about a potential supply glut.
Oil prices fell sharply on Thursday as signs of progress in US-Iran nuclear negotiations and an unexpected rise in US crude inventories raised concerns about a potential supply glut.
Brent crude futures dropped as much as 3.7% to $63.68 a barrel in early trade before paring losses to $63.98. US West Texas Intermediate (WTI) crude fell 3.3% to $61.05.
The sell-off followed remarks by US President Donald Trump, who said Washington was in "very serious negotiations with Iran for long-term peace" during his tour of the Persian Gulf, adding that Tehran had "sort of" agreed to US terms for a possible deal.
Traders view a possible agreement as a step toward easing sanctions on Iran, which could pave the way for the return of Iranian oil exports to global markets.
Adding to the downward pressure, data released late Wednesday showed an unexpected build in US crude inventories last week, fueling concerns about oversupply.
"The market is reacting to both the political developments and the inventory surprise," said a trader at a London-based commodities firm. "Any indication that Iranian barrels could re-enter the market weighs on prices."
Earlier this week, markets rallied on a US-China trade truce and a flurry of investment deals unveiled during Trump's visit to the Middle East.
Still, oil markets remain volatile as investors weigh the potential timing and terms of any US-Iran agreement, along with broader macroeconomic risks.
All Republican senators except one, along with 177 GOP representatives, signed the letter warning against any agreement resembling the 2015 nuclear deal brokered under former President Barack Obama.
That accord, they argued, merely delayed Iran’s nuclear ambitions while allowing it to continue enrichment activities under international oversight.
“The United States cannot afford another deal that gives Iran room to maneuver,” the lawmakers wrote. “The regime must be stripped of all enrichment capacity — even for peaceful energy purposes.”
Rand Paul of Kentucky was the only Republican who did not endorse the letter led by Senator Pete Ricketts of Nebraska and Representative August Pfluger of Texas.
Citing what they described as Iran’s expanding nuclear program, the Republicans expressed skepticism over the possibility of verifying any future agreement that permits enrichment.
“The scale of Iran’s nuclear activity today makes verification of any such deal impossible,” the letter said.
The message comes as the fourth round of US-Iran talks concluded without a breakthrough, and Trump is on a diplomatic tour of Iran's Arab neighbors.
The signatories praised Trump’s earlier decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) and his administration’s “maximum pressure” policy, which reimposed sweeping sanctions on Tehran.
“You have rightly drawn a red line against any deal that permits uranium enrichment,” they wrote. “We stand ready to support your administration with whatever tools are necessary to protect American national security.”
Trump has said that the goal of the negotiations is to achieve "full dismantlement" of Tehran's nuclear program. However, Tehran insists that its enrichment program is not open to negotiation, but it is ready to cap the level of enrichment.
