Oil slips to $92 ahead of US-Iran talks, lowest in 7 years

Oil slid to nearly $92 per barrel on Tuesday ahead of the resumption of indirect talks between the United States and Iran. This could revive a nuclear deal that could eventually allow more oil exports from the OPEC producer, as reported by Reuters.

According to the news agency, an agreement might allow Iran to reintroduce over 1 million barrels of oil per day, accounting for over 1% of world supplies. The nuclear deal discussions will continue in Vienna on Tuesday.

"If sanctions against Iran are lifted, global crude oil supply may receive much-needed support," said Naeem Aslam, chief market analyst at Avatrade.

After hitting a seven-year high of $94 on Monday, Brent oil was down 73 cents, or 0.8 percent, at $91.96 per barrel at 0916 GMT. West Texas Intermediate crude in the United States fell 52 cents, or 0.6%, at $90.80, as mentioned by Reuters.

Both benchmarks have found support this year from rising global demand, Russia-Ukraine tensions, supply disruptions in producers such as Libya, and a slow easing of 2020`s record output cuts by OPEC and its allies.

According to Reuters, eight rounds of indirect discussions between Tehran and Washington, since April, have failed to produce an agreement on the 2015 nuclear deal's resumption. There are still disagreements regarding when and how sanctions on Iran will be lifted.

"Exports could resume swiftly if a nuclear deal is reached," said Tamas Varga of broker PVM. "But it is a big `if`. The re-emergence of Iranian barrels is only a distinct possibility at this stage."

The prospect of a rise in US crude inventories also put pressure on oil.  Analysts anticipate that inventories increased by 700,000 barrels in the week to February 4, Reuters reported.

At 2130 GMT, the American Petroleum Institute releases the first of this week's two supply reports.