Oil consultants FGE sees oil prices $75-$80/b in Q3 if no Iranian deal reached

London (Quantum Commodity Intelligence) – Leading energy consultancy FGE Tuesday said oil prices could reach $75-$80/barrel later in the year, particularly if US sanctions on Iran are not lifted.

Speaking to Bloomberg TV, FGE Founder & Chairman Fereidun Fesharaki said bullish fundamentals are already supporting the market, citing demand growth, falling inventories and high OPEC discipline.

"If there is not an Iranian shadow, prices could hit $75-$80/b by the middle of the third quarter," said Fesharaki, but added prices could then stabilize at the $65-$70/b range.  

Fesharaki noted that a deal to lift sanctions against Iran was still in the balance, saying, "full agreement is only 50:50, maybe even less."

FGE sees Iranian crude and products exports already at 1.2-1.3 million barrels per day, adding, 'the issue is how much more can the Iranians do.'

However, FGE said, 'the market is not so spooked by Iran,' adding that demand growth in Q3 could absorb up to an additional 1.5 million bpd of Iranian exports.

On the demand side, FGE expects a 'substantial return' in US consumption and sees the latest round of COVID-19 restrictions in Asia as a temporary blip in an otherwise robust demand recovery.