Last July a deal was agreed to between Iran and world powers.
Iran would abandon its nuclear weapons development and then sanctions would be lifted (thats the deal in a nutshell, it was a little more detailed than that :-D ). Since July details of Iran's reduction in its nuclear capability have been watch and assessed, and now its formal, they have done so and sanctions have been lifted.
Expectations were that the lifting of sanctions would see Iranian oil available again on international markets, and have been one of the reasons cited for the weight on the price of oil.
Well, its official, now. Sanctions lifted. The supply of oil is now officially higher, again. (And, once again, its a little more detailed than that but that's the gist).
The impact on the oil market will not be simply 'lower prices' I wouldn't think. It will take time for Iran to crank oil production and export back up near capacity. There is also the question of how much of this increase in supply is 'priced in'.
The trend in the price of oil is strong and persistent one - this is another factor for traders to assess. I won't pretend to have a definitive answer.
-
For more on Iranian oil, this from Reuters prior to the official lifting of sanctions: Iran says it won't moderate its plans to boost oil supplies - IRNA
In there you will find two conflicting statements from officials in Iran on the impact on oil production and export.
- Its going up big time
- No, it isn't
