The prospects for Iran's nuclear talks grew even more uncertain after Iran's president-elect said he did not want to meet Biden. Oil prices rose because of this issue.
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| Stunted Iran Nuclear Talks, Oil Prices Skyrocketing |
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| Brent oil price and WTI oil price |
Iran's nuclear talks, which have stalled since the election in Iran on June 18, have fueled investor uncertainty about the future of Iran's oil supply. The agreement between Iran and the US and its allies is getting dimmer. If sanctions against Iran continue, global oil supplies could be depleted because they do not receive injections from Iran.
"The election of a hardline cleric as Iran's new president weighs on markets even more as sanctions are unlikely to be lifted," said Bob Yawger, director of energy futures at Mizuho Securities in New York.
Analysts tend to be skeptical that Iran's President-elect, Ebrahim Raisi, has firmly rejected a meeting with US President Joe Biden despite Washington's willingness to remove all sanctions. In fact, he supports talks between Iran and six countries to revive the 2015 nuclear deal.
The hostile attitude taken by the President-elect of Iran is expected to increase geopolitical tensions and dim prospects for a nuclear program deal. The outlook for crude oil prices is likely to continue to soar. In fact, Bank of America recently said that the average Brent oil price this year is at $68 per barrel and has the potential to touch $100 per barrel next year.
Apart from geopolitical conflicts, oil prices are also supported by optimism for global vaccinations which will increase demand as economic activity recovers in many countries. In particular, the surge earlier this week was also supported by investors' profit-taking against the US Dollar.
