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The potential loss of 1 million barrels of Iranian crude from the world market and the ongoing decline of Venezuela`s oil sector could push oil prices beyond $100 b. Patrick Pouyanne. chairman and CEO of French oil major Total. said Thursday.
`I would not be surprised to see $100 b in the coming months.` Pouyanne said during an appearance at the Center for Strategic and International Studies.
ICE July Brent traded Thursday as high as $80.18 b. the first time prompt Brent has been above $80 b since November 2014. Crude futures have backed off from intraday highs during early US trading hours. but remain higher day on day. At 1427 GMT. ICE July Brent was 63 cents higher at $79.91 b. NYMEX June crude was 41 cents higher at $71.90 b.
Brent prices have not been above $100 b since September 2014.
In its latest Short-Term Energy Outlook. the US Energy Information Administration forecasts Brent to average $70.68 b this year and $65.98 b in 2019.
Pouyanne said geopolitics — particularly President Donald Trump`s decision last week to withdraw the US from the Iran nuclear deal and the severe decline in Venezuelan oil output — are driving prices higher. But. he added. he does not believe the market is near balance and. largely due to pipeline bottlenecks in the US. not enough oil is coming onto the market.
Venezuela oil production fell to 1.42 million b d in April. down 50.000 b d from March and down 560.000 b d from a year earlier. the International Energy Agency said Wednesday.
In addition. as much as 1 million barrels of Iranian crude could be affected as US sanctions on Iran are set to resume.
Total said Wednesday it had halted plans to help develop Iran`s giant South Pars gas field as it seeks to clarify whether the investment can avoid falling foul of returning US sanctions on Tehran.
Pouyanne said Thursday that it was `impossible` to do business with Iran without a waiver from US sanctions since Total cannot risk losing access to the US banking system.
`This is the only way to protect us from a unilateral decision.` he said.
