Second day of falling prices: oil reacts to Washington-Tehran talks
3 February 15:27
Global oil prices are falling for the second day in a row amid signs of a possible de-escalation between the US and Iran, a strengthening dollar following personnel decisions at the Fed, and a new US trade agreement with India that is pushing Russian oil out of the market.
This was reported by [Komersant], citing a Reuters report.
Brent crude oil futures fell 0.5% to $65.96 per barrel. US WTI crude oil also lost 0.5%, falling to $61.81.
This decline was a continuation of Monday’s 5% drop in prices.
The Iran factor
The main driver of the price decline was Donald Trump’s statements that Tehran is “seriously committed” to negotiations. A meeting on the nuclear program is scheduled to take place this Friday in Turkey.
Iranian President Masoud Pezeshkian confirmed his readiness for dialogue, but Trump maintains his tough rhetoric, warning of the presence of US warships in the region: “If there is no deal, bad things could happen.”
The dollar factor
Additional pressure on oil is being exerted by the strengthening of the dollar (index .DXY). The US currency rose after Trump nominated Kevin Warsh as the next chair of the Federal Reserve.
For foreign buyers, oil traded in dollars becomes more expensive, which automatically reduces demand.
US-India agreement
The new trade agreement between Washington and New Delhi caused a sensation. Donald Trump announced a reduction in tariffs on Indian goods from 50% to 18%. The main condition for this discount is India’s complete refusal to purchase Russian oil.
This decision creates an oversupply in the market and deprives Moscow of one of its largest sales channels, putting even more pressure on world prices.
