Iran and world powers reached a framework agreement on Thursday on curbing Iran’s nuclear program for at least a decade.
The tentative agreement, after eight days of marathon talks in Switzerland, clears the way for negotiations on a settlement aimed at allaying Western fears that Iran was seeking to build an atomic bomb and in return lift economic sanctions on the Islamic Republic.
The framework is contingent on reaching an agreement by June 30. All sanctions on Iranremain in place until a final deal. Sanctions have cut Iran’s oil exports to about 1.1 million barrels per day from 2.5 million bpd in 2012.
The OPEC nation is keeping about 30 million barrels of crude on a fleet of tankers ready to be shipped when allowed, into a market already flooded with supply.
Under the outline deal, Iran would shut more than two-thirds of its installed centrifuges capable of producing uranium that could be used to build a bomb, dismantle a reactor that could produce plutonium, and accept intrusive verification.
But Brent oil fell nearly 4 percent on Thursday after a preliminary pact between Iranand global powers on Tehran’s nuclear program, even as officials set further talks in June and analysts questioned when the OPEC member will be allowed to export more crude, reuters.com reports.
‘If the sanctions are lifted, one more million bpd will affect the situation,’said Phil Flynn, analyst at Price Futures Group in Chicago.
The agreement will have an impact on oil prices on the world market, Tatsiana Manyonak, an economic columnist of newspaper ‘Belarusians and Market’, said.
“This is bad for the economies of Russia and Azerbaijan which export a lot. Belarus produces 1.645 mln tons, and the whole volume goes for export. Of course, the lower the price is, the lower foreign currency earnings Belarus gains. On the other hand, Belarus is the largest importer of Russian oil (22 mln tons). If prices go down, it will be profitable for us. Belarus will sell cheaper Russian oil, which is good for our refineries,” the expert stressed.
“This year Belarus has agreed with Russia that all the duties on exports of petroleum products are left in our country, and Belarus exports about 15 mln tons of oil products. But this year, Belarus is losing on oil price downturn because duties on petroleum products are going down too,” she added.