By Alphonsus E.W
Oil prices have dropped on the international market after Iran and US agreed to a deal that would see the Middle- East country fold its Nuclear program.
Though Iran holds the world’s fourth-largest oil reserves, its exports have suffered from the tough economic sanctions slammed on it by US and its allies. Though Iran would not be allowed to increase its oil sales for the next 6 months; the deal has eased tensions in the Middle-East, which remains one of the world’s key oil-producing blocks.
Brent Crude fell more than 2% in early Asian trade on Monday. It dropped by $2.42 to $108.63/ barrel while US Light Sweet Crude, fell 84¢ to $93.64/barrel.
Fuel-intensive companies such as airlines and travel firms received a boost on the stock market as a result.
“There are a lot of sanctions that have been eased, which would allow Iran to slowly re-enter the global economy,” Jonathan Barratt, Chief Economist at Barratt’s Bulletin told the BBC.
“And as for oil- it’s just a 6-month waiting period. If they tick all the boxes during the time, they will be back in that sector as well.”