Oil prices are likely to rise further due to delays in Iranian talks

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Mockups of oil drums and a pump jack are displayed in front of a rising stock chart and “$100” in this February 24, 2022 illustration. REUTERS/Dado Ruvic/Illustration/File Photo

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NEW YORK, March 6 (Reuters) – Oil prices will continue to rise this week amid delays in concluding Iran’s nuclear talks and the potential return of Iranian crude to global markets already suffering from Russian supply disruptions, analysts said.

Talks to revive Iran’s 2015 nuclear deal with world powers were marred by uncertainty on Sunday after Russia demanded a US guarantee that sanctions it faces over the Ukraine conflict will not affect its trade with Tehran. According to sources, China has also made new demands. Continue reading

US Secretary of State Antony Blinken responded to Russian demands on Sunday that sanctions imposed on Russia over its invasion of Ukraine had nothing to do with a possible nuclear deal with Iran. Continue reading

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Last week, the Brent benchmark rose 21% to $118.11 a barrel and US crude rose 26% to $115.68, levels not reached in 2013 and 2008 respectively, when Russia struggled amid new sanctions to sell oil. Continue reading

Iran was the only real bearish factor hovering over the market, but if the Iran deal is delayed now, we could bottom out much quicker, especially if Russian casks are long off the market,” said Amrita Sen, co-founder of Energy Aspects, a think tank.

Sen said Brent could rise to $125 a barrel on Monday and is fast approaching an all-time high of $147 last seen in 2008.

Analysts at JP Morgan said this week that oil prices could rise to $185 a barrel this year.

“The idea wasn’t to sanction oil and gas for its essential nature, but oil is being sanctioned by private actors who don’t want to pick it up or by ports that don’t want to take it, and the longer this goes on, the more supply chains will Buckle it up,” said Daniel Yergin, author and vice chairman of S&P Global ahead of the CERAWeek conference in Houston.

The United States and European partners are considering a ban on Russian oil imports, US Secretary of State Antony Blinken said Sunday, but stressed the importance of maintaining stable oil supplies around the world. Continue reading

Russia exports around 7 million bpd of oil and refined products, or 7% of world supply. Some volumes of Kazakhstan’s oil exports from Russian ports have also faced complications.

Iran will need several months to restore oil flows even if it comes to a nuclear deal, analysts said. Continue reading

Eurasia Group said new Russian demands could disrupt nuclear talks, although they still kept the chances of an agreement at 70%.

“Russia may intend to use Iran as a way to bypass Western sanctions. A written guarantee allowing Russia to do so is likely far beyond what Washington can offer in the midst of an all-out war in Ukraine,” said Henry of Eurasia Rom.

The closure of Libya’s El Feel and Sharara oil fields also supported crude prices, leading to a loss of 330,000 barrels per day (bpd), the National Oil Corporation (NOC) said on Sunday. Libya, an OPEC member, produced about 1.2 million bpd of crude oil in 2021, according to US energy data. Continue reading

In the United States, the average price for a gallon of gasoline hit $4,009 on Sunday, the highest since July 2008, according to the AAA, an automobile association. Consumers are paying 40 cents more than a week ago and 57 cents more than a month ago. Continue reading

Senior US officials traveled to Venezuela on Saturday for talks with President Nicolas Maduro’s administration to determine whether Caracas is prepared to distance itself from close ally Russia. Continue reading

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Additional reporting by Dmitry Zhdannikov in London; Edited by Raissa Kasolowsky and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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