Analysts predict that oil prices will rise further this week as a result of delays in the Iranian nuclear talks’ conclusion and the possible return of Iranian crude oil to global markets. These markets are already suffering from Russian supply disruptions.
Russia is asking for U.S. written guarantees that sanctions against Moscow for its invasion of Ukraine will not affect Russian cooperation with Iran. Sources say that China has made new demands.
The Brent benchmark rose 21% last week to close at $118.11 per barrel, while the U.S. crude closed at $115.68. These levels were not reached in 2013 or 2008. This was due to Russia’s continued difficulties selling oil amid new sanctions.
“Iran was the only bearish factor in the market, but if the Iranian deal is delayed, we could get the tank bottoms much faster, especially if Russian barrels are not off the market for too long,” stated Amrita Sen, co-founder of Energy Aspects thinktank.
Sen stated that Brent could rise to $125 a barrel Monday. This is quickly approaching the record $147 set in 2008.
Analysts at JP Morgan predicted this week that oil could rise to $185 per barrel in the coming year.
Russia exports approximately 7 million barrels per day of oil and refined products or 7% of the global supply. There have been problems with some Kazakhstan oil exports to Russian ports.
Analysts said that Iran would take many months to restore oil flow even if it agrees to a nuclear deal.
Eurasia Group stated that new Russian demands could disrupt talks on nuclear weapons, but it maintained the 70% chance of reaching a deal.
“Russia could use Iran to bypass Western sanctions,” said Henry Rome. “A written guarantee that Russia will allow it is unlikely to be possible in the midst of a full-scale conflict in Ukraine,” Henry Rome, Eurasia’s director of Eurasia, said.
