Freedom Broker analysts maintain a positive outlook on the oil market and allow for the price of WTI oil to rise to $86 per barrel as early as July. According to experts, a key driver could be increased sanctions pressure on Iran, which could limit crude supplies to the global market.
Freedom Broker notes that in recent weeks the oil market has come under pressure from expectations around talks between the U.S. and Iran, as well as OPEC+ decisions to increase production. Analysts believe that investors are still underestimating the risks. A resumption of restrictions on Iranian oil exports could quickly shift the supply-demand balance in favor of higher prices.
WTI price depends on sanctions against Iran
By the end of last week, the price of WTI oil rose by 0.8%, reaching $71.4 per barrel. Despite relative calm in the Middle East, the market continues to monitor developments in U.S.-Iran relations.
Freedom Broker believes that even if the current situation persists, the risk of a new escalation has not fully disappeared. Any restrictions on Iranian oil supplies could bring back a geopolitical premium, creating prerequisites for a more substantial rise in prices.
OPEC+ increases production
One of the main factors limiting the rise in prices remains OPEC+ policy. Alliance members continue to gradually increase production, seeking to return previously cut volumes of supply to the market.
Nevertheless, Freedom Broker analysts believe that the impact of this factor may prove less significant if the risks of supply disruptions from Middle Eastern countries again come to the fore. In that case, the market may focus not on rising production, but on a possible reduction in exports from certain regions.
Investors are watching the U.S.-Iran conflict
In recent months, the oil market has remained extremely sensitive to geopolitical news. After the active phase of the conflict between the U.S., Israel, and Iran ended, some investors began to price in a decline in risks to crude supplies. However, Freedom Broker believes that the likelihood of new restrictions on Iranian exports remains, and therefore the upside potential for oil prices remains higher than their downside potential.
This is not an individual investment recommendation.