Baku. 21 May. REPORT.AZ/ Last week, oil price in the world market exceeded $ 80 / bbl for the first time since the end of 2014.
Analytical Group of Report informs, it is $ 30-40 less than the 4-year high of oil prices ($ 110-120), and about $ 50 more that its lowest limit recorded in early 2016 ($ 28).
Price change in the near future will be more dependent on the political processes around Venezuela and Iran.
US withdraws from Iran nuclear deal
Following the nuclear deal signed by Iran with US, China, Russia, France, UK and Germany in 2015, it was decided to abolish the economic sanctions imposed on the Islamic Republic in January 2016.
Lastly, third largest oil exporter in OPEC Iran increased its daily oil export figure up to record 2.61 mln bbl last month. This is 2 times more than the figure before the sanctions were abolished.
However, on May 8, the US announced that it would quit the nuclear deal with Iran and impose sanctions on that country.If this happens, the demand for Iranian oil will decline dramatically, which will lead to a decrease in the production of the Islamic republic, thereby supply in the oil market will reduce and prices to go up. Nevertheless, decision of India and China that buy average of 1.4 mln barrels of oil from Iran a day whether to choose another country or not will affect oil prices.
Crisis in Venezuela deepens
During 1999-2013, at times of Hugo Chávez Venezuelan daily oil production fell from 3.5 mln to 2.7 mln barrels. In 2014, Nicolas Maduro came to power in this country. During his reign oil prices declined in the world market. Lastly, the Latin American country, with 95% oil and gas exports has experienced economic downturn, famine and hyperinflation have occurred in the country. Only in 2017 the volume of the Venezuelan economy has dropped by 16%. From February this year, oil production in Venezuela is below 1.57 mln. bbl, and this is one of the key factors in raising oil prices on commodity exchanges. If the demand for Venezuelan oil increases and this country lifts its output, then oil prices will decline.