Brent crude oil rallied to climb by over $3 yesterday, after being hit by the effects of the preliminary nuclear deal reached by Iran and six world powers last week.
The global benchmark price was also helped by the fact that major producer Saudi Arabia upped its prices for sales to Asia, signalling an improvement in demand in the region. It had previously fallen by five per cent after the nuclear deal was revealed last Thursday.
The agreement, set to be finalised in June, will see international sanctions on Iran gradually lifted in return for curbs on the country’s nuclear programme.
The market is preparing for a flood of Iranian oil, however, analysts from Morgan Stanley said: “Even if a final deal is reached, we do not expect any physical market impact before 2016.”