Iran lowers price on shipments to Asia, sending Brent lower

Brent crude has fallen below $60 a barrel for the first time since July 2009 amid reports Iran has lowered its January prices for oil shipments to Asia.

Prices dropped 3.1% to $59.18 per barrel in morning trade, according to the ICE. West Texas Intermediate crude edged down 3% to $54.24 per barrel.

Iran’s reported move follows the recent trend of major Gulf producers cutting their prices for shipments to Asia in January in a bid to preserve their market share irrespective of the impact on prices.

Oil has declined about 45% this year as the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) cut demand forecasts for output.

The United Arab Emirates has said that OPEC will hold back from stopping output even if crude reaches $40 a barrel. OPEC is responsible for 40% of the world’s supply of oil.

“With this breach of oil’s latest proposed support level, once more investors are scrambling to figure out what will be the end point of this plunge,” said Spreadex financial analyst Connor Campbell.

“However, without any actual movement towards cutting oil production, there is no reason for oil to stop falling. It is now left to see how long this global standoff on the oil situation, and what price will cause either OPEC or the US to blink first.”