Oil prices surge with pause in Iran nuclear deal, weaker dollar

Oil prices rose on Monday as talks about ending US sanctions on Iranian crude paused and dollar retreated from two-month highs as well.

Brent crude surged by $1.24 or 1.7 per cent to $74.74 a barrel for August while US West Texas Intermediate (WTI) rose by $1.94 or 2.7 per cent to $73.59 for July.

Benchmarks have surged in the past four weeks as globally COVID-19 vaccination pick up pace and due to optimism around summer travel.

Bank of America said that this year Brent crude can average to $68 per barrel and could touch $100 next year with more reopening.

Oil prices surged due to weaker US dollar and halt in talks of reviving Iran nuclear deal on Sunday as Ebrahim Raisi won the country’s presidential election.

"The election of a hardliner in Iran is weighing on market (supply) as sanctions look less likely to be lifted," said Bob Yawger, director of Energy Futures at Mizuho in New York, reported Reuters.

If the deal succeeds, Iran could be exporting an extra 1 million barrels per day, or 1 per of the global supply, for more than six months.

(With inputs from Reuters)

Picture Credits: Reuters