World

Easing Iran Tensions Cause Oil Prices To Drop

The hopes that tensions in Iran could diminish have determined a small drop in oil prices on Wednesday. According to the Associated Press the economic miracle took place due to the more relaxed relationships between Iran and the West. However, the problems that the Eurozone is currently facing might have negative repercussions on the oil price in the future.

Car drivers will be happy to hear that the fuel will be somewhat cheaper in the upcoming months than it used to be until now. The decrease was determined by an improvement registered in the relationships between Iran and the West. Thus, Iran declared on Wednesday that they will allow UN inspectors to search their country for nuclear weapons. Justin Harper, an analyst at traders IG Markets told the press that prices began to drop as soon as the announcement was made public. Thus, West Texas Intermediate, New York’s main contract, dropped 89 cents reaching the price of $90.96 a barrel.

Iran’s chief nuclear negotiator will discuss the matter with Yukiya Amano, the International Atomic Energy Agency (IAEA) chief, to find a method which could prove UN that Iran is no longer holding nuclear weapons. Amano’s declaration was made before the discussions that took place with Tehran in Baghdad on Wednesday, so diplomats were afraid that there could be tensions between the involved nations. Both Western nations and Israel remained cool even after the announcement was made.

Great part of the tensions between the Western countries and Iran were caused by Israel’s belief that Tehran was developing atomic weapons. As a consequence, various sanctions have been imposed on Tehran’s financial and oil industries. Iran, on the other hand, claims that the nuclear programme they are developing is meant for peaceful purposes including medical treatments for cancer.

Although the situation seems to be heading towards the right track in Iran, the Eurozone debt crisis continues to affect oil prices in a negative way. Analyst fear that things could get worse if Greece is forced to exit the European Union as a result of its financial problems.

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