US crude oil falls 2.7% in light of potential Iran deal

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US crude oil surged into levels similar to those it reached during the 2008 economic crisis before falling almost 3% on Thursday, marking its first decrease in four days, in light of the West and Iran nearing a nuclear deal that could see Iranian oil making it to the market it was barred from due to Washington's unilateral sanctions.

The United States had imposed harsh sanctions on Iran following Washington's withdrawal from the JCPOA in 2018 under then-President Donald Trump, which had major impacts on Iran's economy and the global oil markets.

US crude’s West Texas Intermediate benchmark saw a $2.93 decrease, or 2.7%, reaching $107.67 a barrel. Prices had earlier surged to $116.57, the highest in nearly a decade in a half since the 2008 Global Financial Crisis.

The surge has been affected by global concerns that the sanctions on Russia would impact energy exports from the country providing the world with 10% of its oil needs.

Brent also settled down $2.47, or 2.2%, at $110.46 a barrel, also decreasing for the first time in four days. Brent peaked at $119.78 on Thursday, marking its highest price since May 2012.

Oil prices simmering down came against the backdrop of reports suggesting that Iran and world powers nearing a nuclear deal that could free Iran from US sanctions and boost the global economy.

Iranian media quoted Russian chief Vienna negotiator Mikhail Ulyanov as saying an agreement was likely over the next few days, paving way for the legitimate return of Tehran's oil to the market. 

Iran's crude exports were averaging 2.4 million barrels per day, peaking at more than 2.8 million before Trump's move. 

Al Mayadeen's correspondent reported that information from more than one source suggest a deal will be reached soon in the Vienna Talks.

Iran's Foreign Ministry spokesperson Saeed Khatibzadeh commented on the talks saying they were still ongoing: "no one can say that the deal is done until all outstanding remaining issues are resolved. Extra efforts needed," he tweeted.

The Vienna talks between Iran and the remaining JCPOA parties began in April on the assumption that the US, under the Joe Biden administration, is willing to reverse the so-called maximum pressure policy pursued by former President Donald Trump against Tehran.

Iran has stated that it will not accept anything less than the complete removal of all US sanctions in a verifiable manner. It also wants assurances that Washington will not withdraw from the agreement again.