Oil prices witnessed a slight and expected fluctuation on Monday as sanctions on Iran's fuel exports were eased as as they went into effect, allowing major buyers to continue importing Iranian oil at least temporarily.
After Monday’s drop in prices by 0.5 percent for Brent crude and 0.6 percent for the West Texas Intermediate (WTI), it rose again soon after the US press conference to announce the details of the second package of sanctions against Iran.
Brent crude was $73.51 a barrel, up 0.68 cent from Monday’s closing price, or 0.93 percent higher.
US WTI crude oil rose 35 cents, or 0.55 percent, to $63.49 a barrel. The crude has lost more than 15 percent of its value since early October, when it reached its highest level in four years.
Observers believe that the current fluctuation in oil prices is expected, given the initial turmoil in the markets after the major decisions taken.
However, the markets will return to calm later, especially in light of the abundance in supply and the record levels of oil production reached by major producers during October, which would compensate any possible shortage of Iranian crude in the markets.
The US reimposed on Monday sanctions that were lifted under the 2015 Iran nuclear deal negotiated by the administration of former President Barack Obama. It also added 300 new designations in Iran’s oil, shipping, insurance and banking sectors.
US Secretary of State Mike Pompeo said Washington has granted exemptions to eight countries allowing them to temporarily continue buying Iranian oil.
The eight exempted countries are China, India, Japan, Italy, Greece, Taiwan, Turkey and South Korea, said Pompeo, vowing to be “relentless” in pressuring Iran until the latter changes its destabilizing acts in the Middle East.
“Treasury's imposition of unprecedented financial pressure on Iran should make clear to the Iranian regime that they will face mounting financial isolation and economic stagnation until they fundamentally change their destabilizing behavior,” said US Treasury Secretary Steven Mnuchin in a joint press conference with Pompeo Monday.
