Oil falls, Ukraine crisis

Oil prices dipped on Thursday as negotiations to resurrect a nuclear deal with Iran neared their conclusion. Still, rising tensions between Russia and the West over Ukraine.

Brent crude was down $1.26, or 1.3 percent, at $93.55 per barrel. West Texas Intermediate (WTI) crude in the United States fell $1.34, or 1.4 percent, to $92.32. Earlier in the day, both contracts had fallen by more than 2%.

The oil market caught in the middle of a tug of war between Iranian sanctions relaxation and Russian-Ukraine tensions. According to State Department spokesperson Ned Price, the US is in the “very final phases” of indirect discussions with Iran to preserve a 2015 deal limiting Tehran’s nuclear activity.

France said on Wednesday that a decision on whether or not to save the nuclear deal was only days away and that the political decision was up to Tehran, as Tehran called on Western powers to be “realistic.”

South Korea said on Wednesday that it had held talks on resuming Iranian crude oil imports and unfreezing Iranian cash, with a new deal perhaps on the horizon. Previously, South Korea was one of Tehran’s most important Asian oil buyers. Continuing worries about a possible Russian invasion of Ukraine, on the other hand, continue to support oil prices due to the risk of disruption in energy supply.

Resume Iranian oil imports

Asian refiners, who have been large importers of Iranian oil in the past, are eager to resume imports if a deal reaches to resurrect the 2015 nuclear deal, leading to more supply on global markets and lower prices.

After former US President Donald Trump withdrew from the nuclear deal with Iran and re-imposed sanctions on Tehran’s oil exports, most Asian customers halted Iranian oil imports in 2019.

Last week, Iran and the United States resumed indirect negotiations on the nuclear accord. Western diplomats had hoped for a settlement by now, but complex issues have still to settle.