Brent oil briefly falls below $28 after Iran sanctions lifted

AP FILE PHOTO

SINGAPORE, Singapore — Brent crude briefly fell to fresh multi-year lows below $28 a barrel in Asia on Monday on fears of a worsening supply glut after Western sanctions on Iran were lifted, allowing the country to resume oil exports.

READ: Iran ‘return’ to oil market risks more price pressure

Brent for March delivery tumbled to as low as $27.67, or by 4.4 percent from Friday’s close, before rebounding to trade at above $28. The last time Brent closed below $28 was in November 2003.

At around 0145 GMT, Brent was trading 43 cents, or 1.49 percent, lower at 28.51. US benchmark West Texas Intermediate for delivery in February was down 35 cents, or 1.19 percent, at $29.07 a barrel.

“The drop was due to the Western sanctions on Iran being lifted. This means we will be seeing a bigger oil glut with Iranian crude exports coming back to the market,” said Phillip Futures analyst Daniel Ang.

The United States and the European Union lifted the sanctions on Sunday after the UN’s atomic watchdog confirmed that Iran had complied with its obligations under a landmark deal last year to curb Tehran’s nuclear program.

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