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BofAML: oil could rise to $120 if Iran exports discontinue

July 09/ 10:25

Tehran. 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.

"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 a barrel. 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, Oil Price reported.

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.

The US is reimposing sanctions on Iran, after President Donald Trump withdrew from the Iran nuclear agreement in May. 

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