Oil prices spiked Monday as a potential hook surfaced in the 2015 revival of Iran’s nuclear deal that could increase oil supplies, while Goldman Sachs said the case for higher prices remained intact even as Iranian exports increased.
Brent crude oil futures for July rose $ 1.25, or 1.9%, to $ 67.69 a barrel by 0950 GMT, while the US West Texas Intermediate for July was at $ 64.73 a barrel, up by $ 1.15 or 1.8%.
Oil prices fell nearly 3% last week after Iranian President Hassan Rouhani said the United States was ready to lift sanctions on his country’s oil, banking and shipping sectors.
However, the Iranian parliament spokesman said on Sunday that a three-month surveillance agreement between Iran and the UN nuclear watchdog had expired and that access to pictures from some Iranian nuclear facilities would be suspended.
European diplomats said last week that failure to agree to an extension of the surveillance agreement would plunge broader, indirect talks between Washington and Tehran to revive Iran’s 2015 nuclear deal into crisis. These talks are to be resumed this week in Vienna.
Former President Donald Trump withdrew the United States from the deal in 2018 and re-imposed sanctions.
“All in all, it seems to be only a matter of time before the parties involved put a new nuclear deal on paper,” said Stephen Brennock of the oil broker PVM.
“Investors are preparing for a new wave of Iranian crude oil, which is certainly heavily discounted … Despite all this alarmism, it is unlikely that an aggressive surge in Iranian production and exports will curb the decline in global oil supplies.”
Even with a possible restart of Iranian exports, the case for higher oil prices remains due to a surge in global demand driven by vaccines, analysts at Goldman Sachs said.
“Even if we aggressively anticipate a restart in July, we estimate that Brent prices will still hit $ 80 a barrel in the fourth quarter of 2021. Our new base case for a restart in October continues to support our forecast of $ 80 a barrel for this summer, “the bank said in a note. Continue reading
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