RT – The crude rally is likely to continue this year as OPEC countries are losing their exports, analysts told RT. The key reason is US sanctions against major producers Iran and Venezuela.
“The reduction of oil exports by Iran amid the expected increase in demand for crude brings in bullish mood to the market,” says financial institute FinIst analyst Denis Lisitsyn.
“There is another important fact that makes oil prices grow. The economic collapse in Venezuela has resulted in 1.3 million bpd drop in production, which continues to shrink. It can cause a shortage of heavy oil in the US, supplied from Venezuela, which will need to be replenished somewhere,” the analyst added.
These factors could result in a surge in oil prices to $100 per barrel by year-end. The spike in prices comes to the chagrin of the White House, which has triggered the price spike, Lisitsyn says.
Iran is not going to give up its exports so easily, according to Eldiyar Muratov, president at Singapore Castle Family Office.
“The US forces as many countries as possible to abandon oil purchases from the Islamic Republic. Iran made it clear that this time it is determined to defend itself. The latest supply negotiations with India are direct evidence of this. Tehran will continue to search for new markets, build new alliances and increase supplies to Asian markets,” he said.
Another analyst contacted by RT doesn’t believe oil prices will grow to $100 per barrel, and are likely to find their balance around $85. “The lack of Iranian exports will soon be compensated. Russia has already reached the peak of production of 11.35 million barrels, the same amount the country produced before the OPEC + deal. The Saudis added 300,000 barrels and will be able to add more, as soon as the output ceiling is raised,” said Petr Pushkarev, chief analyst at TeleTrade.
He doesn’t expect a dramatic fall in Iranian exports. “Only the US is withdrawing from the deal. Asia and Europe are determined to resist the pressure from Washington. Supplies from Iran will be reduced by a maximum of 1.5 million barrels,” said Pushkarev.