Oil prices drop after Iran nuclear deal

Oil prices sank Monday as a nuclear deal between Iran and six world powers made it more likely that the sanctions choking Iranian oil exports will eventually be lifted.

Brent crude, a benchmark for international oils, was down $2.43 at $108.62 a barrel at midmorning Bangkok time in electronic trading on the ICE futures exchange in London. Benchmark US crude fell 85 cents to $93.99 on the New York Mercantile Exchange.

After marathon negotiations in Geneva, Iran on Sunday reached an agreement with the US, Britain, France, Russia, China and Germany to limit enrichment of uranium to five percent, far below the level needed for nuclear weapons.

Iran got limited relief from sanctions that have hobbled its economy, but an embargo on its oil exports remains in place while negotiations continue for a more enduring deal to ensure the country only uses nuclear technology for peaceful purposes such as power generation.

The Iran deal did not appear to affect Israeli markets, which rose to record highs on Sunday despite dire warnings by Israeli leaders that the deal was a mistake.

If Iranian oil returns to international markets, the additional supply is likely to make crude less expensive.

Benchmark US crude is down from about $110 in October because of ample supplies and muted demand.