New sources of production from the US and other countries have substantially changed the dynamics of the oil markets, reducing Iran’s influence on global energy markets.
Even before the embargo, Iran’s oil production as a percent of global supply had declined to 4.2% compared to 4.6% five years ago and had dropped to 3.1% since the embargo came into force. Therefore, we believe the drop in the oil price following the agreement was an overreaction to the news.”
“In the next 6 months there is likely to be little change in Iran’s oil exports. Increased seasonal demand from the winter heating season in the northern hemisphere, increased demand from refiners as maintenance work is completed, and the strong outlook for US and China growth should help shore up prices in the short term in our view.
We expect Brent to range trade between US$100-US$120/bbl and WTI to recover to above US$100/bbl.”