HOUSTON, Europe Brief News – Investors and sellers are seeing the resumption of Iranian Nuclear Deal Talks as a ray of hope to steady the oil disruption. The Oil prices jumped to almost $120 a barrel on Thursday. This is their highest in nearly a decade as sanctions disturbed the Russian oil sales but the rally lost some of its sparkle on rising prospects for an Iran nuclear deal that could add some extra supplies.
Brent crude oil rose to $119.84 a barrel, the highest since 2012 as extra support coming from data showing US crude stockpiles had hit multi-year lows.
A sharp increase has been seen in the prices of Brent as it jumped by more than a third in the past month. The contract’s six months spread hit a record high of more than $21 a barrel suggesting very tight supplies. US crude hit $116.57, its peak since 2008 before rebounding to $109.66.
Iranian Nuclear deal
Prices dropped in early US trading after an Iranian reporter tweeted of a breakthrough in talks to resume an Iran nuclear deal that could see Iranian barrels make their way back into the market.
Helima Croft, RBC Capital Analyst said “We again caution that the deal is still not done and the sums entailed would simply be too small to backfill a major Russian disruption”.
There is a huge spike seen in oil prices on Thursday as the US prepares new sanctions on the Russian oil refining sector. It also suggests that oil and gas might be the next target.
Russia is always in competition with Saudi Arabia for the title of biggest crude and refined oil products exporter. Russia reportedly ships more than 7 million barrels per day with about half of them going to European countries.
US and Western Allies have imposed dozens of Sanctions on Russia from the SWIFT payment system to Sports sanctions but both parties are holding themselves back from banning Russian Oil and gas export.
Jarand Rystad, Rystad Energy Chief Executive said “ we expect the Russian oil exports will plunge by 1 million BPD from the indirect impact of sanctions and voluntary actions by companies”.
He further added, “ Oil prices are likely to continue to climb potentially beyond $130 per barrel”.
US oil inventories continue to fall. Tanks at the key Crushing crude hub in Oklahoma were at their lowest since 2018.
