As US President Donald Trump announced that the United States will exit the Iran nuclear deal, oil prices tumbled as media speculation on what President Trump would do with the Iran nuclear agreement put investors on edge.
In volatile trading, crude oil was down 2.5 per cent. Oil prices nearly turned positive for the day while Trump was speaking. They had been down as much as 4.4 per cent earlier amid nervousness ahead of the official announcement.
Trump signed a memorandum that he said would begin reinstating American sanctions on the Iranian regime. Those sanctions could take months to go into effect as the US government develops guidance for companies and banks.
The key to the energy market is how much Trump’s tough stance on Iran will restrict the flow of crude out of the OPEC nation. Analysts say that up to 1 million barrels per day of Iranian crude are at stake.
That could hold prices down in a market that has already been short on supply because of production cuts by OPEC and Russia. Crude oil prices settled above $70 a barrel on Monday for the first time since late 2014.
