Commodity merchants, Trafigura and Mercuria, say oil prices could rise towards $100 per barrel towards the end of the year or by early 2019 as sanctions against Iran bite. The merchants made the prediction on Monday at the Asia Pacific Petroleum Conference (APPEC) in Singapore.
Almost two million barrels per day (bpd) of crude could be taken out of the market as a result of the U.S. sanctions against Iran by the end of the fourth quarter this year, said Daniel Jaeggi, president of commodity merchant Mercuria Energy Trading, making a crude price spike to $100 a barrel possible.
Washington has already implemented financial sanctions against Iran and it plans to target the country’s oil exports from November 4, putting pressure on other countries to also cut Iranian crude imports. Ben Luckock, co-head of oil trading at fellow merchant Trafigura said crude oil prices could rise to $90 per barrel by Christmas and to $100 by the New Year as markets tighten.
Oil prices have been rising since early 2017, when the Organization of the Petroleum Exporting Countries (OPEC) together with other suppliers including Russia started withholding output to lift crude values. Unplanned disruptions from Venezuela to Libya and Nigeria have further tightened the market just as global demand approaches 100 million bpd for the first time.
Source: Premium Times