International benchmark Brent crude traded at $86.13 per barrel at 4.52 p.m. local time (1352 GMT) for a 4.78% decrease from the closing price of $90.46 a barrel in the previous trading session. Brent oil price dropped to its lowest level since Jan. 26 when it was trading at $87.79 a barrel.
American benchmark West Texas Intermediate (WTI), trading at $78.86 per barrel at the same time, lost 5.54% after the previous session closed at $83.49 a barrel.
Demand pressures after the dollar index increased 0.8% to 111.99, its highest level in 20 years, fueled the price downturn.
Further axing demand, central banks are instigating aggressive interest rate hikes against high inflation globally.
The US Federal Reserve, in its much-anticipated meeting, raised its benchmark interest rate by 75 basis points for the third consecutive time to fight record inflation.
After the US Fed's interest rate increase, the Bank of England raised its key interest rate by 50 basis points on Thursday, recording its seventh consecutive rate hike. Norway, Switzerland, Taiwan, South Africa, Indonesia and the Philippines followed suit, also increasing policy rates on Thursday.
On the supply side, further price falls were limited when US-Iran talks stalled in the revival of the 2015 nuclear deal by limiting Iran’s oil barrels from hitting the market.
Talks have been hindered several times, halting the prospects of a sanctions lift on the Iranian economy and its oil exports.
The EU's foreign policy chief Josep Borrell confirmed Tuesday on the margins of the opening of the UN General Assembly in New York that he did not expect a breakthrough in reviving the Iran nuclear deal this week, saying he does “not expect that anything will happen during this week” after the parties “made some proposals that were certainly not contributing to look for a final result.”
At the same time, he stressed, that they were and “are still close” to getting a final result because he does “not see a better solution than the one we have proposed.”
The Iran nuclear deal – officially called the Joint Comprehensive Plan of Action (JCPOA) – was signed in 2015 by Iran, the US, China, Russia, France, UK, Germany and the EU.
Under the agreement, Tehran committed to limit its nuclear activity to civilian purposes and in return, world powers agreed to drop their economic sanctions against Iran.
(Anadolu Agency, September 23, 2022)