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

Keyfield Ventures into Indonesia’s Oil and Gas Market with New Partner

Fire Contained at Vietnamese Oil Platform Undergoing Decommissioning (Video)

Velesto’s Jack-Up Rig Set for Drilling Job off Indonesia

Turkey Discovers New Black Sea Gas Reserve

Indonesia's Medco Starts Production at Natuna Sea Fields

Indonesia Grants Approval to Kuwaiti Firm for Anambas Block in Natuna Sea

TMC Books Compressors Orders for FPSO and LNG Vessels

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

Woodside to Shed Some Trinidad and Tobago Assets for $206M

Current News

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

China's Sinopec Laucnhes $690M Hydrogen Venture Capital Funds

CIP, ACEN Partner Up for First Large-Scale Offshore Wind Farm in Philippines

Valeura Concludes Eight-Well Drilling Campaign in Gulf of Thailand

Three Dead in Chevron's Angolan Oil Patform Fire

BW Opal FPSO Vessel set for Work off Australia

Keyfield Ventures into Indonesia’s Oil and Gas Market with New Partner

Fire Contained at Vietnamese Oil Platform Undergoing Decommissioning (Video)

Velesto’s Jack-Up Rig Set for Drilling Job off Indonesia

Petronas, Inpex Secure Oil and Gas Exploration Rights off Indonesia

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