Crude Climbs as Israel Fuels Push to End Iran Nuclear Deal

Analysts say there won't be any significant oil price drops until Trump makes a decision on Iran nuclear deal. File Image / Pixabay

It was something critics insisted all along would happen, but evidence presented by Israel that Iran has been cheating on its nuclear deal reached with former U.S. president Barack Obama caused  nervous traders to boost crude prices on Monday.

West Texas Intermediate was up 45 cents at $68.55 per barrel, while Brent rose 43 cents to $75.07 per barrel.

Both benchmarks climbed from intraday lows after Benjamin Netanyahu, prime minister for Israel, revealed files that supposedly prove Iran ran a secret program to produce nuclear weapons, even though it was prohibited from doing so under the rules of the Obama deal.

Netanyahu's bombshell, if verified, will presumably add impetus to U.S. president Donald Trump's inclination to scrap the deal altogether on May 12 and reimpose sanctions against the Islamic republic; currently, French president Emmanuel Macron is working with Iranian president Hassan Rouhani to salvage the deal.

For the record, Netanyahu accused Iran of conducting a secret weapons program until 2003 codenamed "Project Amad" and said Iran continued to pursue nuclear weapons knowledge after Project Amad was shuttered.

Javad Zarif, foreign minister for Iran, tweeted that the evidence was a "rehash of old allegations" which had already been dealt with by the United Nations nuclear watchdog; however, a statement from the White House said, "These facts are consistent with what the United States has long known: Iran has a robust, clandestine nuclear weapons program that it has tried and failed to hide from the world and from its own people."

With slightly less than two weeks left before Trump reaches a decision, analysts say the degree of uncertainty hanging over the deal means the market is extremely sensitive to any developments: Tamas Varga, strategist for PVM Oil Associates, said, "Until May 12, you're not going to see any significant downward correction.

"Reimposing U.S. sanctions is not a foregone conclusion just yet."

Varga's sentiment is widely shared by other experts, including John Kilduff, founding partner at Again Capital, who last week remarked that "The Iranian situation is just haunting the market, it's just going to continue to provide support until we get to May 12; at this point, the geopolitical risk is bountiful."