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OPEC closely monitoring Biden sanctions on Iran and Venezuela

OPEC


HE Abdelmadjid Attar, Algeria's Minister of Energy and President of the OPEC Conference.

- Sanctions relief 'the big unknown' for oil producers
- Attar says extra Saudi Arabian cut may accommodate Iranian barrels

By Illies Sahar/Platts

ALGIERS
Petroleumworld 01 21 2021

Global vaccination campaigns and the resumption of international air traffic will support oil prices within $55-$60/b in the near term, but OPEC will be closely watching for clearer signals from new US President Joe Biden on whether he will ease sanctions on Iran and Venezuela, Algerian Energy Minister Abdelmadjid Attar said Jan. 21.

Any sanctions relief could unleash crude volumes that would complicate the producer bloc's efforts to rebalance the market amid a still fragile global recovery from the coronavirus pandemic.

"Right now, that's the big unknown," Attar said in an interview with Russian news agency Sputnik, adding that the next few weeks will be "decisive" for the oil market, which should be "very attentive" to the decisions of the Biden administration.

Biden has said he would seek to restore the nuclear deal with Iran, though political opposition from hardliners in both Washington and Tehran could gum up the works.

Iran's crude production has roughly halved to about 2 million b/d in recent months since former President Donald Trump pulled the US out of the nuclear pact in May 2018 and reimposed sanctions.

S&P Global Platts Analytics forecasts that Iranian crude supply could grow 500,000 b/d between June and December, assuming a new agreement is forged by late 2021 and that the Biden administration is not as stringent about policing sanctions enforcement as the Trump administration.

Venezuela's prospects of sanctions relief appear less promising, and the country's deteriorating infrastructure would make any significant production rebound a tall prospect. Venezuela pumped an average of 500,000 b/d in 2020, according to S&P Global Platts survey of OPEC production, down from 2.34 million b/d in 2015.

OPEC, Russia and several other allies have instituted deep production cuts to support prices through the coronavirus crisis.

Saudi Arabia surprised the market by announcing Jan. 6 that it would cut an additional 1 million b/d in February and March to help drain inventories that had built through the pandemic.

Attar said the move may help accommodate the return of Iranian crude.

"Riyadh seems to be preparing for new American decisions," Attar said.

Spain's Repsol was the first oil major to set net-zero emissions to target in December 2019, and the company has pivoted fast to grow its low-carbon energy business launching a raft of wind, solar, biofuels, and green-hydrogen projects. The surge in clean energy projects will see Repsol's low-carbon spending jump to 40% of total capex by 2030, up from an already peer group-leading 25% in 2020.

Following an interview with Luis Cabra , Repsol's head of Energy Transition, Sustainability, and Technology, Platts Robert Perkins and Roman Kramarchuk discuss the key points of Repsol's low-carbon transition strategy and how they fit with the S&P Global Platts broader outlook of the energy transition landscape.

______________


By Illies Sahar from S&P Global Platts

spglobal.com
01 21 2021

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