25 Nov 2013

Oil prices fall as Iran cuts nuclear deal with West

9:07 pm on 25 November 2013

The United States Secretary of State says the deal reached on Sunday over Iran's nuclear programme will make Israel and the Middle East a safer place.

John Kerry was speaking after Iran agreed to curb some of its nuclear activities in return for about $US7 billion in sanctions relief.

But Israel has described the agreement as an "historic mistake".

Iran's president said its right to uranium enrichment had been recognised but Mr Kerry denied this.

Tehran has, however, agreed to stop all enrichment above 5%.

World powers suspect Iran's nuclear programme is secretly aiming at developing a nuclear bomb - a charge Iran has consistently denied.

The deal reached overnight in Geneva will last for six months, while a permanent agreement is sought.

British Prime Minister David Cameron said it "demonstrates how persistent diplomacy and tough sanctions can together help us to advance our national interest".

US President Barack Obama welcomed the deal, saying it would "help prevent Iran from building a nuclear weapon".

But Israeli Prime Minister Benjamin Netanyahu has condemned the deal, saying it is an historic mistake, rather than an historic agreement, and should have required the destruction of all enrichment centrifuges.

Israel fears Iran is buying time to continue its nuclear weapons program and the deal offers billions of dollars in concessions for little in return.

The White House says President Obama has spoken by telephone to Mr Netanyahu, and noted that Israel had "good reason to be sceptical about Iran's intentions".

The two leaders reaffirmed their shared goal of preventing Iran obtaining a nuclear weapon, the spokesman said.

The agreement negotiated by six world powers obliges Iran to curb its nuclear programme, in exchange for the lifting of some sanctions.

Oil prices fall

Oil prices have fallen in the wake of the deal.

Iran holds the world's fourth-largest oil reserves but its exports have been hurt by the tough sanctions.

Though Iran will not be allowed to increase its oil sales for six months, the deal has eased tensions in the Middle East - a key oil-producing area.

Brent crude fell more than 2% in early Asian trade on Monday.

It dropped by $US2.42 to $US108.63 per barrel, while US light sweet crude fell 84 US cents to $US93.64 per barrel.

"There are a lot of sanctions that have been eased, which will allow Iran to slowly re-enter the global economy," Jonathan Barratt, chief economist at Barratt's Bulletin told the BBC.

"And as for oil - it's a just a six-month waiting period. If they tick all the boxes during that time they will be back in that sector as well."


There were scenes of jubilation as Iranian negotiators returned from Geneva after clinching the nuclear deal.

Many of the negotiators were mobbed by enthusiastic crowds.

A number of Persian newspapers, such as the liberal daily Etemaad, ran front page headlines welcoming the deal.

And Iran's own leaders also welcomed the interim agreement reached after four days of intense negotiations in Geneva.

In a nationwide broadcast on Sunday, President Rouhani repeated that Iran would never seek a nuclear weapon, and he hailed the deal, saying it met one of Iran's fundamental principles.

"No matter what interpretations are given, Iran's right to enrichment has been recognised," he said.

The negotiations were with representatives of the P5+1 group of nations - Britain, China, France, Germany, Russia and the United States.