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🇦🇺 Australia /Elections & Politics

Live: ASX to slip, oil plunges to 3-month low on reports US to scale back Iran sanctions

From ABC Australia · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Ongoing story
  • Oil prices dropped to a three-month low following reports that the U.S. may ease sanctions on Iran, allowing oil sales.
  • The Australian share market is expected to open lower, mirroring losses in Wall Street's tech stocks.
  • An unnamed U.S. official indicated that sanctions relief is performance-based and contingent on Iran adhering to an agreement.

Oil prices have plummeted to their lowest point in three months amid reports that the United States is considering a significant rollback of economic sanctions against Iran, potentially allowing the nation to resume oil sales. This development is expected to impact global markets, with the Australian share market anticipated to open lower.

Wall Street experienced losses, particularly in tech stocks, which dragged down the S&P 500 and Nasdaq. The Australian share market is likely to follow suit, reflecting the broader market sentiment. Brent crude futures fell by 4.4% to $US79.49 a barrel, while WTI futures dropped 5% to $US76.73 a barrel.

This is a performance-based agreement. Iran can only access any benefits of the MOU if they abide by all of the points they agreed to – including no nuclear weapon, neutralizing its enriched material, and not interfering with the free flow of navigation in the Strait of Hormuz.

— Unnamed senior U.S. officialExplaining the conditions attached to the potential easing of sanctions on Iran.

According to Reuters, quoting a senior U.S. official who spoke on condition of anonymity, the waiver of sanctions on Iranian oil sales would take effect upon the signing of an interim "peace deal" this week. This relief would extend to services like banking, transportation, and insurance necessary to facilitate these sales. The official emphasized that the agreement is performance-based, meaning Iran must adhere to all agreed-upon points, including nuclear non-proliferation and freedom of navigation in the Strait of Hormuz, to receive any benefits.

Brett Erickson, a sanctions expert, described the potential move as a "multibillion-dollar concession to Iran." He noted that Iran possesses substantial oil reserves, estimated at over 100 million barrels in storage and on tankers, much of which is already outside the U.S. blockade. This could allow Iran to quickly capitalize on any eased sanctions. The global daily oil consumption stands at approximately 100 million barrels.

After months of blockade pressures, Washington has chosen to provide Tehran with an irreversible financial benefit.

— Brett EricksonDescribing the potential impact of the U.S. decision on Iran's economy.
DistantNews Editorial

Originally published by ABC Australia. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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