If US gets its way with Iran, oil could spike to $120

TEHRAN, Jul. 07 (MNA) – Oil could spike to $120 per barrel or more if the US were able to eliminate all Iranian oil exports, as it has said it would like to do by Nov. 4, according to Bank of America Merrill Lynch.

The US is demanding zero purchases of Iranian oil by November, and if that were possible, oil could spike above $120 per barrel, given global crude supplies, says Bank of America Merrill Lynch, CNBC reported.

"In our view, a complete cutoff of Iran exports would be very hard to manage and likely result in an oil price spike above $120/bbl. For now, the uncertainty around US government policy is leading to lower exports and an increase in Iranian oil in floating storage," wrote Francisco Blanch, BofAML head of global commodities and derivatives research.

Analysts are skeptical the US can keep even half the Iranian exports of about 2.4 million barrels a day from the market, but some have raised their expectations since US officials began talking up their goal of removing all Iranian exports. They have also warned of potential price spikes if there are any more unexpected production outages in the world.

Now there are some unexpected outages, including Libya, and Venezuela's oil industry is in decline.

OPEC and Russia and other producers last month agreed to add 1 million barrels to the market. But Trump has also asked Saudi Arabia to tap its 2 million barrel spare capacity and add more oil to the market.

Blanch is skeptical that the kingdom could pump 12 million or more barrels a day.

LR/PR

News Code 135465

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