Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the URA.RU internet portal on the consequences of the announced agreement between Iran and the United States, including the opening of the Strait of Hormuz, for the global oil market.
Oil prices will consolidate at a level slightly below today's values in the next two months, while the United States and Iran are negotiating on the remaining controversial issues. If the disagreements can be removed, Brent will continue to fall in price and may fall to $ 60 by the end of the year, Alexey Belogoryev believes. However, such a development, in his opinion, is far from guaranteed, because compromises have not yet been found on key issues.
Now the parties have only taken an operational pause, the expert notes. The key issue of the nuclear program, which caused the United States to start this conflict, has not yet been resolved, he emphasizes."If the announced signing does not fail and takes place on June 19, then I would expect world oil prices to consolidate at about $ 75-80 per barrel of Brent for at least the next one and a half to two months. Firstly, navigation through the Strait of Hormuz is currently being restored, and secondly, what is no less, and perhaps even more important, is the time for those promised 60-day negotiations, following which a peace agreement should already be signed," Belogoryev says.
So far, the positions voiced by the parties are diametrically opposed. In addition, Israel has stated that it is not obliged to follow the agreements, and it is likely that it may disrupt them by resuming hostilities in Lebanon, Belogoryev added.
If a peace agreement is signed, oil may fall to $70 or even slightly lower after that, the analyst believes. The dynamics, in his opinion, will depend on the supply and demand balance, which will develop by autumn. In addition to the situation in the Strait of Hormuz, this ratio may also be affected by the pace of recovery of Iranian exports, which were severely affected by military strikes, the expert draws attention to.
As for the discount in the value of the difference between prices at ports of departure and harbors in India and China, it will also remain stable if the United States does not impose new blocking sanctions against the shadow fleet, the analyst believes.
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