Oil prices held on to gains during early hours of the first trading day of the year as unrest in Iran continues. Both Brent and WTI have climbed above the $60/bbl mark, flagging the first year-open at these levels since 2014. Brent crude was trading at $66.83/bbl by 09.00 AM GMT, while WTI front month stood at $60.45/bbl. Both markers were relatively flat from last year’s close, as geopolitical developments offer support.
Iran remains in unrest for several days as protests against the government and the religious leadership continue. What started as demonstrations against economic hardship, has now become a political statement as some protestors are openly challenging the Supreme Leader.
Similar social movements resulted in loss of large crude oil production volumes in North Africa during the Arab Spring a few years ago, the Middle East, however, managed to avoid such escalations.
Iran exported 2.12 million bpd of crude oil in December, from 2.14 million bpd in November. This is on top of almost 300,000 bpd of condensate oil exported in December, following a sharp drop to 153,000 bpd in November as South Pars pipeline issues capped volumes.
Thomson Reuters Oil Research estimates December production of crude oil to have stood at 3.58 million bpd for Iran and project Q1 2018 output to remain at similar levels.
The Oil Research Team
Supply Chain & Commodities Research