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Oil prices have risen to their highest level since 2008, owing to delays in Iranian talks

Oil prices have risen to their highest level since 2008, owing to delays in Iranian talks

Oil prices have risen to their highest level since 2008, owing to delays in the potential return of Iranian crude to global markets and as the United States and its European allies consider prohibiting Russian oil imports. On Sunday, talks to resurrect Iran’s 2015 nuclear deal with world powers were hampered by Russia’s demand for a US guarantee that the sanctions imposed on it as a result of the Ukraine conflict will not harm its trade with Tehran. According to sources, China has also raised new demands.

In response to Russia’s demands, US Secretary of State Antony Blinken stated on Sunday that sanctions imposed on Russia for its invasion of Ukraine have nothing to do with a possible nuclear deal with Iran. Meanwhile, the US and its European allies are considering a ban on Russian oil imports, according to Blinken, and the White House is working with key Congressional committees that are considering their own ban. Brent crude rose $11.67, or 9.9 percent, to $129.78 per barrel by 6:50 p.m. EST (2350 GMT), while WTI crude rose $10.83, or 9.4 percent, to $126.51, putting both contracts on track for their highest daily percentage gains since May 2020.

Both benchmarks rose to their highest levels since July 2008 in the first few minutes of trading on Sunday, with Brent at $139.13 per barrel and WTI at $130.50. Brent peaked at $147.50 per barrel in July 2008, while WTI peaked at $147.27. Following the surge in crude prices in the first few minutes after the market opened on Sunday, U.S. gasoline and distillate futures rose to record highs.”Iran was the only real bearish factor hanging over the market, but if the Iranian deal is delayed, we could get to tank bottoms a lot faster, especially if Russian barrels remain off the market for an extended period of time,” said Amrita Sen, co-founder of the think tank Energy Aspects.

According to JP Morgan analysts, oil could reach $185 per barrel this year.”The idea was not to sanction oil and gas because of their essential nature,” said Daniel Yergin, author and vice chairman of S&P Global, ahead of the CERA Week conference in Houston. “But oil is getting sanctioned by private actors not wanting to pick it up or ports not wanting to receive it, and the longer this goes on, the more supply chains are going to buckle.” Russia exports approximately 7 million barrels per day of crude oil and refined products, accounting for approximately 7% of global supply. Some of Kazakhstan’s oil exports from Russian ports have also been hampered.

According to Bank of America analysts, if most of Russia’s oil exports are cut off, there could be a 5 million barrel or larger shortfall, resulting in oil prices doubling from $100 to $200 per barrel. Analysts estimate that even if Iran achieves a nuclear deal, it will take several months to restore oil flows. Eurasia Group said new Russian demands could derail nuclear talks, but it still sees a 70 percent chance of a deal. “Russia may intend to use Iran to avoid Western sanctions. A written guarantee allowing Russia to do so is likely to be far beyond what Washington can offer in the midst of a full-fledged war in Ukraine “said Henry Rome of Eurasia.

The closure of Libya’s El Feel and Sharara oilfields resulted in a loss of 330,000 barrels per day (bpd), according to the National Oil Corporation (NOC) on Sunday. According to US energy data, Libya, an OPEC member, produced approximately 1.2 million barrels per day of crude in 2021. Meanwhile, according to AAA, an automobile association, the average price of a gallon of gasoline in the United States hit $4.009 on Sunday, the highest since late July 2008.

Consumers are paying 40 cents more per gallon than a week ago and 57 cents more per gallon than a month ago. According to AAA, which has data dating back to 2000, U.S. gasoline prices at the pump reached a record $4.114 on July 17, 2008. Senior US officials arrived in Venezuela on Saturday for talks with President Nicolas Maduro’s administration, hoping to determine whether Caracas is willing to distance itself from close ally Russia.