Oil Estimated to Trade at $80 in Q4 Regardless of Iran
Oil gained on Monday, when analysts noticed a potential difficulty in renewing the 2015 Iran nuclear deal that is expected to add more oil to the existing oil supply. Goldman Sachs, however, said that whether Iran exported more oil or not, oil prices would go up anyway, due to a successful vaccine rollout around the world and concomitant increase in oil demand.
With the Iranian nuclear deal proving to be problematic, Brent crude oil futures for July added 72 cents, or 1.1%, to trade at $67.16 a barrel in the early morning on Monday. The West Texas Intermediate for July advanced 1.1%, thus adding 67 cents and trading at $64.25 a barrel.
Oil prices dropped nearly 3% last week after Iran’s president, Hassan Rouhani, said that the US was prepared to cancel sanctions on Iran’s oil, banking, and shipping sectors. Ahead of the probable cancelation of US sanctions, Iran has been pumping more oil in recent months.
Analysts maintain that Iran’s potential exports will not change the oil’s trajectory drastically, since oil prices will go up regardless of Iran’s supply. Recovering economies will require more oil and will push prices higher with or without Iran’s participation in the oil trade. Analysts foresee that Brent prices would still reach $80 per barrel in the fourth quarter of 2021.
