A few hours after world leaders reached a deal with Iran on nuclear control, oil price in the international market dropped by 2.1 percent.
The immediate change was informed by reports and fears that Iran, which has been under global sanctions, could pump 40million barrels into an oversupplied market, thereby pushing the oil price down again.
The oil price fell significantly yesterday morning after news broke of the deal between Iran and six world powers in Vienna, Austria.
According to agency reports, Iran has agreed to a range of measures designed to ensure that it cannot develop a nuclear bomb, in return for the removal of sanctions. It cleared the way for Tehran’s return to world oil markets.
In the wake of the news, Brent crude was down 2.1 percent at $56.66 a barrel at 10am BST, with West Texas Intermediate dropped 2.3 per cent at $50.99.
If Iran rejoins the oil market, it will be a boost for consumers but a blow for oil-dependent countries.
The deal was sealed after talks that lasted for over 20 months.
The agreement, described by the Cable News Network, CNN, as a focal point of US President Barack Obama’s foreign policy, appeared set to reshape relations between Iran and the West, with its effects likely to ripple across the volatile Middle East.
Representatives of Iran, the United States and other nations involved in the marathon talks were holding a final meeting in Vienna, yesterday.
Obama praised the deal reached, saying the agreement met the goals he had in place throughout negotiations.
“Today (yesterday) after two years of negotiation the United States together with the international community has achieved something that decades of animosity has not: a comprehensive long-term deal with Iran that will prevent it from obtaining a nuclear weapon,” Obama said from the White House, with Vice President Joe Biden at his side.
“This deal is not built on trust. It’s built on verification,” Obama said.
Iranian President Hassan Rouhani also praised the deal, speaking after Obama finished, as televisions in Iran broadcast the U.S. President’s statement live, translated into Farsi.
“Negotiators have reached a good agreement and I announce to our people that our prayers have come true,” Rouhani said in a live address to his country.
The essential idea behind the deal is that in exchange for limits on its nuclear activities, Iran would get relief from sanctions while being allowed to continue its atomic programme for peaceful purposes.
After news of the deal emerged, Yukiya Amano, the chief of the International Atomic Energy Agency, said he had signed a “roadmap” with the Iranian government “for the clarification of past and present outstanding issues regarding Iran’s nuclear program.”
The deal reduces the number of Iranian centrifuges by two-thirds. It places bans on enrichment at key facilities, and limits uranium research and development to the Natanz facility.
The deal caps uranium enrichment at 3.67 percent and limits the stockpile to 300 kg, all for 15 years.
Iran will be required to ship spent fuel out of the country forever, as well as allow inspectors from the IAEA inspectors certain access in perpetuity. Heightened inspections, including tracking uranium mining and monitoring the production and storage of centrifuges, will last for up to 20 years.
The U.S. estimates that the new measures take Iran from being able to assemble its first bomb within two-three months, to at least one year from now.

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