A new chapter of hope for Iran

The accord seeks to end nearly 12 years of nuclear disputes between Iran and the western powers led by the US. The full details of the deal are not yet known, but it would mean tough new curbs on Iran's nuclear programme in exchange for wide-ranging relief of international sanctions against the country.

Oil prices dropped by around USD 2/barrel or 4% after the historic agreement between the six world powers (P5+1) and Iran over the country's nuclear programme after two years of intensive negotiations.

The oil market started to price in the return of Iranian oil just before the first deadline for the negotiations was reached on 30 June. Then as the negotiations made progress and a new postponement seemed more and more unlikely, oil prices continued to fall. A deal was already priced in when we reached the final day of negotiations, therefore the price fall today has been limited.

To measure the total impact of the deal on the oil prices we need to take into account the 16 days of negotiations. During this period of time the price of oil for short-term delivery (the front month contract) has fallen by around USD 6/barrel or 10%, and oil with delivery at end-2016 has fallen by USD 5/barrel. 

"With an Iranian nuclear deal signed, Brent crude oil is expected to trade closer to USD 70/barrel in 2016 than our current forecast at USD 75/barrel, but the Brent oil price will average USD 62/barrel in 2015", forecasts Nordea bank.