Iran's nuclear program is frozen for six months and it will roll back in some key areas. NBC's Andrea Mitchell reports.
Global oil prices dropped and European shares rose in early trading Monday, as markets gave a cautious welcome to the weekend’s nuclear deal with Iran.
The agreement, which would see the partial lifting of sanctions on Tehran in exchange for a temporary freeze on its nuclear program, buys time for world leaders seeking a deeper, longer-term deal.
Brent crude, an international benchmark used to price oil used by many U.S. refineries, shed over $2 a barrel Monday to trade around $108.70.
The possibility of a future deal that would allow Iran to restore full production will keep prices lower in the shorter-term, analysts believe.
"It has implications for OPEC and probably also for the U.S. as well,” Jonathan Barratt, chief executive officer of Sydney-based commodity research firm Barratt's Bulletin, told CNBC Asia's Squawk Box on Monday.
"Oil will continue to trade lower for some time... the Middle Eastern premium is eroding quite fast," he added.
The FTSEurofirst 300 share index climbed toward a recent five-year high and Germany's DAX set a new record Monday as traders welcomed the prospect of greater stability, Reuters reported.
Secretary of State John Kerry says the deal doesn't say Iran has a right to enrichment, but Iran's foreign minister, Javad Zarif, may have a different viewpoint. NBC's Ann Curry reports.
"The Iran deal reduces the medium term global geopolitical risk,” Didier Duret, chief investment officer at ABN-AMRO Private Banking, told Reuters.
The newfound cooperation between Iran and the West eases tensions that pushed oil prices higher in recent years.
The deal also raises the possibility that a more comprehensive agreement would eventually allow Iran to restore oil production to pre-sanctions levels. That could add 1 million barrels per day of oil to world markets — enough to meet the entire global growth in demand for 2014 projected by the International Energy Agency.
Kevin Book, an analyst at ClearView Energy Partners in Washington, predicted the price of Brent crude could fall to $90 a barrel by the end of next year if talks yield a final agreement. That's 17 percent below Brent's level early Monday when it fell $2.35 to $108.70 a barrel.
Political reaction to Sunday’s Geneva deal was mixed, with Republicans critical of President Barack Obama’s approach signaling resigned acceptance of the accord.
SecKerry says will test #Iran's intentions has no illusions but Israel worries this takes the pressure off iran— Andrea Mitchell (@mitchellreports) November 24, 2013
“This is in essence it, and the deal has been made,” said Sen. Bob Corker, the senior Republican on the Senate Foreign Relations Committee, implying that Congress really couldn’t undo the deal.
“On balance, we will be safer with this pragmatic agreement than without it,” the U.K.’s Daily Telegraph said in an editorial Monday. “The West, however, should not drop its guard,” it said.
The Washington Post said the deal was “worth trying” despite “substantial” risks – including the prospect of a rift between the U.S. and its key allies, Israel and Saudi Arabia.
Iran and six of the world's powers agreed on a "first step deal" that is meant to limit Iran's nuclear program in exchange for easing sanctions, which has the potential to reshape relationships throughout the Middle East. NBC's Ann Curry reports.
“Even though the temporary agreement does not achieve permanent and total dismantlement of Iran’s nuclear program, no one can seriously argue that it doesn’t make the world safer,” the New York Times said in an editorial Monday.
Saudi Arabia said the interim deal could be a step towards a comprehensive solution.
"The government of the kingdom (of Saudi Arabia) ... sees that if there was goodwill, this agreement could represent a preliminary step towards a comprehensive solution to the Iranian nuclear programme if that led to the removal of weapons of mass destruction, especially nuclear weapons, from the Middle East and the Arab Gulf region," the cabinet said in a statement carried by state news agency SPA, according to Reuters.
Nawaf Obaid, a fellow at the Belfer Center for Science and International Affairs at Harvard University's Kennedy School of Government and a senior fellow at the King Faisal Center for Research and Islamic Studies, said: "The manner by which the deal was done is not a historic moment, but a historic monumental blunder of epic proportions."
The most vehement critic of the accord remains Israel, whose Prime Minister Benjamin Netanyahu said it was “not a historic agreement…it was a historic mistake."
But outside of Israel’s government, the response was more nuanced.
"It's not a very bad deal, it's something in the middle,” said Yoel Guzansky, expert on Iran at The Institute for National Security Studies, Tel Aviv.
"The basic fear in Israel is it legitimizes Iran. I think some western companies are waiting to sign deals and western governments waiting to call President Rouhani. There's a feeling of a slippery slope here."
However, United Arab Emirates English-language newspaper The Nation, said “cautious optimism must prevail, unless Iran is shown to be using the agreement as a cynical ploy to buy it time to continue its nuclear program.”
“The goal of keeping nuclear weapons out of the Gulf region without resorting to military force is one worth pursuing, albeit with skepticism and verification,” it said.
NBC News’ Tom Curry, Becky Bratu and Christina Marker, CNBC’s Katie Holliday, Reuters and The Associated Press contributed to this report.
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This story was originally published on Mon Nov 25, 2013 9:51 AM EST