Oil prices set to surge further on Iranian nuclear talks delays

Analysts from JP Morgan said this week oil could soar to $185 (Sh26,640) per barrel this year. [Reuters]

Oil prices are set to surge further this week due to delays to the conclusion of Iranian nuclear talks and the potential return of Iranian crude to global markets, which are already suffering from Russian supply disruptions, analysts said.

Russia has raised fresh demand for written US guarantees that sanctions on Moscow over its invasion of Ukraine would not harm Russian cooperation with Iran. China has also raised new demands, according to sources.

Last week, the Brent benchmark rose 21 per cent to close at $118.11 (Sh13,464) a barrel and US crude gained 26 per cent to close at $115.68 (Sh13,110), levels not seen 2013 and 2008, respectively, as Russia struggled to sell oil amid fresh sanctions.

“Iran was the only real bearish factor hanging over the market but if now the Iranian deal gets delayed, we could get to tank bottoms a lot quicker especially if Russian barrels remain off the market for long,” said Amrita Sen, co-founder of Energy Aspects think-tank.

Sen said Brent could rise to $125 (Sh14,250) per barrel today, quickly approaching an all-time high of $147 (Sh16,700), last seen in 2008.

Analysts from JP Morgan said this week oil could soar to $185 (Sh26,640) per barrel this year.

Russia exports around seven million barrels per day of oil and refined products or seven per cent of global supply. Kazakhstan’s oil exports from Russian ports have also faced complications. Iran will take months to restore oil flows even if it reaches a nuclear deal, analysts said. 

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