KUWAIT: Two Kuwaiti analysts anticipated that Kuwaiti crude oil prices would be in the vicinity of $65-75 per barrel till the end of this year, as global Brent prices would range between $70 and $80 per barrel. The predications came after the US announced recently that waivers for Iranian oil exports will expire on May 2.
Some Gulf countries, including Saudi Arabia and UAE, can offset a potential oil supply crush due to US measures, believing that the world oil price would hinge upon the compliance of the importers of Iranian oil to US sanctions and a looming decision by OPEC and non-OPEC members to boost production, they told KUNA.
Dr Khaled Bodi, an oil analyst and chairman of an administrative consulting center, said Iran will be affected by the recent US decision to drop exemptions given to eight buyers of Iranian oil, should the latter commit to US sanctions. Bodi expected global oil prices will be negatively affected by the US measures, regarding the recent jump in oil prices as a normal, albeit temporary, reaction. Accordingly, the price will be back to the level that preceded the cancellation of waivers, hitting nearly $70 per barrel until the year end, he pointed out.
However, the expert disparaged the impact of the US decision on Kuwaiti oil production and prices as “limited” due to expectations that there would be no remarkable oil shortage. At least one third of buyers of Iranian oil are anticipated not to comply with US sanctions, while OPEC may not do something in a formal and collective mode to make up for a looming oil crunch.
Mohammad Al-Shatti, another Kuwaiti oil expert, said some observers, including Citibank, believed that US measures will not lead to a complete suspension of Iranian oil exports. He believed that the US sanctions could only lead to a 50 percent drop in Iranian oil exports, which hit 1.2-1.3 million barrels per day in the first quarter of 2019.
The latest US move will be in effect as of May 2, he said, noting that Iranian oil output, according to OPEC figures, fell from 3.8 million bpd in June 2018 to 2.7 million bpd in March 2019, down 1.1 million bpd. On oil price levels, the Kuwaiti expert said they are expected to go up to $70 per barrel in the coming month, while Kuwaiti crude will be in the vicinity of $65-75 per barrel.
The US administration on Monday said it will not renew exemptions granted last year to buyers of Iranian oil, a more stringent than expected decision that caught several key importers who have been pleading with Washington to continue buying Iranian oil sanctions-free. In November, Washington renewed the oil sanctions on Iran six months after the US pulled out from the landmark JCPOA clear deal, and gave eight countries – China, India, South Korea, Japan, Taiwan, Turkey, Italy and Greece – a six-month waiver from the measures.
Iranian Foreign Minister Mohammad Javad Zarif warned the United States against attempting to close the Strait of Hormuz between the Arabian Gulf and the Gulf of Oman. If the United States tries to stop Iran from using the Strait of Hormuz to transport its oil exports, Tehran will continue to find international buyers for its oil and Washington “should prepare for consequences,” he stressed during a recent UN conference. – KUNA