Oil Falls as US-Iran Deal Allows Iran to Sell Oil
Oil prices fell to a three-month low this week. The US and Iran reached a deal allowing Iran to sell oil right away.
Brent crude oil dropped below $80 per barrel. Markets expect more oil supply to become available soon.
The deal is a memorandum of understanding signed electronically on Sunday. It covers not just oil exports but also banking and shipping services.
Iran's tankers were already moving ahead of a formal signing set for Friday in Switzerland. But full sanctions relief depends on Iran meeting key demands.
Those demands include keeping the Strait of Hormuz open. Iran must also make progress on its nuclear program.
Iran could also get access to about $100 billion in frozen assets. But that depends on Iran dismantling its nuclear program.
The deal dominated the G7 meeting in France on Tuesday. Leaders expect the deal to increase oil supply and keep prices low.
Key Terms 5
- Brent crude A global standard used to set the price of oil worldwide
- Strait of Hormuz A narrow sea passage where about 20% of world oil passes through
- Memorandum of understanding A formal written agreement between two parties to work together
- Sanctions Rules that stop a country from trading or doing business normally
- G7 A group of seven of the world's largest economies that meet to discuss global issues