OLD BRIDGE, N.J. (DTN) -- New York Mercantile Exchange West Texas Intermediate crude oil futures and Brent crude oil on the Intercontinental Exchange settled lower in volatile trade as U.S. President Donald Trump announced the U.S. will exit the 2015 nuclear accord and re-impose sanctions immediately.
The 2015 deal was struck between Iran and six nations -- the U.S., United Kingdom, Russia, France, China and Germany.
Traders and analysts estimate sanctions on Iran could reduce oil exports by as much as 1 million bpd and potentially strain the position of U.S. allies in Europe doing business in Iran. Several companies, including Airbus, Boeing and Total, have struck business deals in Iran and could be examining the idea of exemptions to US sanctions.
At 2:30 p.m. EDT, NYMEX June West Texas Intermediate futures settled $1.67 lower at $69.06 per barrel (bbl). The ICE Brent crude for July delivery fell $1.32 to $74.85 bbl settlement.
NYMEX June RBOB futures declined 2.26 cents to $2.1114 gallon settlement and the June ULSD contract settled 2.73 cents lower at $2.1577 gallon.
At Trump's 2:14 p.m. White House press briefing from the Diplomatic Room, the president said, "I am announcing today that the U.S. will withdraw from the Iran nuclear deal, and reinstating sanctions at the highest level immediately."
Trump said the so-called Iran deal was supposed to protect the U.S. from Iran. "In fact the deal allowed Iran to continue enriching uranium," he said. "A constructive deal could have been constructed at the time but it wasn't."
"Today, we have definitive proof that this Iranian promise was a lie," Trump said.
Trump said in the time since the deal has been reached, Iran's military budget has increased nearly 40%. "The deal's sunset provisions are totally unacceptable and could start a nuclear arms race in the Middle East," Trump said.
Trump added that today's action sends a "critical message to Iran that when I make a statement I mean it. If the regime continues with its nuclear ambitions it will have problems like it has never seen before."
Trump, addressing the Iranian people, said he was "ready, willing and able" to renegotiate another agreement with Iran.
Brian Whary can be reached at firstname.lastname@example.org
© Copyright 2018 DTN/The Progressive Farmer. All rights reserved.