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.
As the Organization of the Petroleum Exporting Countries and allies 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."Supply misses are rising. Market recognition of strained capacity is also growing," the bank said. "We believe this should drive a higher risk premium ...
"Most market analyses of prices the year ahead have focused on a lack of surplus production capacity and have ignored the likelihood of a return of Iranian oil to markets", Citi said. 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.
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