Oil Prices Retreat on Prospect of Iran oil Sanctions Easing

Sonali Paul.
Friday, February 18, 2022

Oil prices retreated on Friday after wild swings during the week, as the prospect of extra supply from Iran returning to the market outweighed fears of a possible Russian invasion of Ukraine, which could disrupt supply.

Brent crude LCOc1 futures fell 68 cents, or 0.7%, to $92.29 a barrel at 0124 GMT, extending a 1.9% drop from the previous session.

U.S. West Texas Intermediate (WTI) crude CLc1 futures shed 67 cents, or 0.7%, to $91.09 a barrel, after sliding 2% in the previous session.

Both benchmark contracts were headed for their first weekly fall in nine weeks after hitting their highest points since September 2014, with a deal taking shape to revive Iran's 2015 nuclear agreement with world powers.

Diplomats said the draft accord outlines a sequence of steps that would eventually lead to granting waivers on oil sanctions. That would bring about 1 million barrels a day of oil back to the market, but the timing is unclear. 

"Nevertheless, the spectre of a potential 1 million b/d hitting the oil market saw Brent crude oil prices come under pressure," ANZ Research analysts said in a note.

Analysts do not expect prices to fall much in the near term, even with the prospect of a return of more Iranian oil, with the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, struggling to meet their production targets.

"Oil markets are vulnerable to supply disruptions given global oil stockpiles are tracking near seven‑year lows and as OPEC+ spare capacity comes into question given disappointing OPEC+ supply growth," Commonwealth Bank (CBA) analyst Vivek Dhar said in a note.

With oil demand also recovering as air travel and road traffic picks up, CBA sees Brent holding in the $90 to $100 a barrel range in the short term and topping $100 "quite easily" if tensions escalate between Russia and Ukraine.

U.S. President Joe Biden is set to host a call on Friday on the Ukraine crisis with the leaders of Canada, France, Germany, Italy, Poland, Romania, Britain, the European Union, and NATO, the office of Canada's Prime Minister Justin Trudeau said. 

(Reporting by Sonali Paul. Editing by Gerry Doyle)

Categories: Energy Middle East Industry News Activity Oil Price

Related Stories

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

RINA Wins FEED Contract for Petronas’ Flagship CCS Project in Malaysia

Vietsovpetro Brings BK-24 Oil Platform Online Two Months Early

Shell’s Brazil-Bound FPSO Starts Taking Shape

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

MDL Secures Cable Laying Job in Asia Pacific

Yinson Production Nets DNV Approval for New FPSO Hull Design

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Current News

Sponsored: UAE Breaks Ground on GW-Scale Renewable Energy Hybrid

Pertamina Joins Petronas in Ultra-Deepwater Asset off Indonesia

Malaysia’s Petronas and Oman’s OQEP Strengthen Oil and Gas Ties

Southeast Asia’s 2GW Cross-Border Offshore Wind Scheme Targets 2034 Buildout

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Viridien to Shed More Light on Malaysia’s Offshore Oil and Gas Potential

US Pressure on India Could Propel Russia's Shadow Oil Exports

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

RINA Wins FEED Contract for Petronas’ Flagship CCS Project in Malaysia

ABL Secures Rig Moving Assignment with India's ONGC

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com