Investing.com – President Trump’s decision to quit the 2015 nuclear deal with Iran and re-impose economic sanctions gave oil prices an immediate lift but its
overall impact depends on a number of factors and may take months to play out.
The biggest question is how much Iranian oil will be knocked off the market. Analysts say it could be anywhere from 250,000 to 1 million barrels a day.
Another question is who other than U.S. producers will pick up the slack. Saudi Arabia and other OPEC members could also step in, but it is unlikely.
Joe McMonigle, senior energy analyst at Hedgeye Risk Management, says a lot of the supply concerns have already been priced into the market.
“But once it becomes clear there’s physical oil coming off the market you could see a bump up to over $80 a barrel,” for North Sea crude, he says.
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