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Oil, Gas Industry Fears Skills Shortage

What’s Next For Iranian Oil?

Refinery

Let me state the obvious, the Iran sanctions are the biggest oil story of 2018, period. The prospect of losing out millions of barrels of oil daily shook the market and was a part of crude’s surge by roughly 15 USD per barrel this year (as of today, the 2018 Brent Dated average is 71 USD per barrel against 54 USD per barrel in 2017). The closer we get to November 4th, the more agitation and market jitter. Iran has also made the global crude market very difficult to read and predict, to put it in the words of Saudi Aramco CEO Khalid al-Falih, 2019 will be a “very difficult year to predict” both from the supply and demand sides. Underscoring the complexity of anticipating future developments, top trading companies have an entirely different view on how markets would react to Iranian crude gradually evaporating from the supply side.

During a recent conference in London, top-ranking representatives of leading trading companies articulated their expectations on the average 2019 Brent price. Ian Taylor of Vitol said $65 per barrel, Torbjörn Tornquist of Gunvor stated $70-75 per barrel, Jeremy Weir of Trafigura went with $80-85 per barrel, whilst Alex Beard of Glencore forecasted $90-95 per barrel. It seems that someone from the respectable four will be right – the only problem is that the other three will be inevitably wrong, despite having the widest and most thorough market knowledge one can get. This volatility we must accept as an essential…

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