SINGAPORE: Dubai and Oman weakened for a second session in the Middle East crude market on Tuesday after world powers and Iran finally reached a nuclear agreement which could pave the way for more Iranian oil exports.
Iran and the six powers have reached a deal that will grant Tehran sanctions relief in exchange for curbs on its nuclear programme, Iranian and Western diplomats said, although there were no immediate details on how sanctions would be eased on oil.
"Asian buyers have always been interested in buying more crude. I think Asia will start importing more as soon as possible, and Europe will follow," Ehsan Ul-Haq, a senior market consultant at KBC Energy Economics, said on Thomson Reuters' Global Oil Forum.
Traders are also concerned about how soon Iran would release an estimated 40 million barrels of crude from storage.
Iran "will try to profit from this storage in the beginning," Ul-Haq said.
"The energy side is interested in how soon can Iranian crude be bought freely," a trader with a North Asian refiner said.
Middle East crude benchmarks weakened after the news. The August-September Dubai spread eased to 20 cents a barrel in backwardation, while the September-October spread widened to 23 cents in contango, Reuters data showed.
The weaker benchmarks may support spot differentials for September-loading spot crude but weak refining margins, especially for gasoil could drag down demand, traders said.
Buyers were also cautious about whether benchmark prices would remain weaker given strong buying interest on the window.
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