(M.C)
Efforts by governments to drive an economic rebound are likely to add strain to tight oil supplies and could send prices to fresh peaks, unless international talks end sanctions on Tehran and lead to a surge in Iranian exports. Nervousness of possible disruption of exports from major oil producer Russia as it masses troops on neighbouring Ukraine’s border has already helped to push oil prices to their highest since 2014. At around $95 a barrel, international crude prices are a way off the all-time peak of more than $147 hit in July 2008.
As the Organization of the Petroleum Exporting Countries and allies (OPEC+) gradually unwind output cuts implemented in response to the record demand fall at the height of the COVID-19 pandemic in 2020, JP Morgan predicts the producer group will continue incremental increases but underperformance by some members will drive prices. Research consultancy Energy Aspects offered a more bullish view, saying the lifting of sanctions should not drive prices below $80 this year. Central to a more cautious outlook is the possibility that a price rise will lead to more production of the shale oil lying under the southern United States. “Up to 2.2 million barrels per day (bpd) of U.S. tight oil could be unleashed in the event of a supercycle with oil prices remaining around or above $100 per barrel,” consultancy Rystad Energy said.
