It’s just a matter of time before sanctions on Iran are lifted. And when they are lifted, oil is likely to tumble further as the Persian Gulf country boosts production and battles swing-producer Saudi Arabia for market share.
Crude-oil for August delivery has been walloped with a 12% fall so far in July on the New York Mercantile Exchange. Prices touched lows under $51 a barrel on Wednesday. They stand at their lowest levels since April. August Brent crude traded on the ICE Futures exchange has seen a month-to-date loss of more than 11% and traded at $56.42 a barrel on Wednesday.
But oil prices are poised to fall further as a nuclear deal between Iran and the U.S., China, France, Russia, the U.K. and Germany appears likely. Such a deal would unleash a new supply of crude oil back on to the market.