Oil prices rose sharply today as economists predicted that the surge in demand due to the lifting of Covid-19 restrictions would offset any supply bump should sanctions against Iran’s oil be waived.
In recent days prices have been trending downwards on the news that talks between Iran and the US on reinstating the former nuclear pact between the two countries.
Under such a deal, the parties have been discussing lifting sanctions on crude oil from the Middle Eastern state.
But today prices bounced back as it was revealed that significant differences remained between the two sides.
Worldwide standard Brent Crude picked up 3.3 per cent to rise to $68.55, while West Texas Intermediate oil rose 3.7 per cent to $65.95.
Analysts at Goldman Sachs said that even if sanctions were lifted, oil prices were on track to hit $80 this year.
So strong a recovery is largely due to the rebound in demand, driven by the impressive speed of vaccination around the world.
It would cap a remarkable turnaround for the commodity, which saw prices dwindle to historically low levels during last year’s lockdowns.
“Even aggressively assuming a restart in July, we estimate that Brent prices would still reach $80 per barrel in fourth quarter 2021,” the bank said in a note.