Mubasher: The global oil market may need Saudi Arabia and Russia to step in to prevent a possible uptick in prices towards $100 per barrel (pb) after the US sanctions are re-imposed on Iran, an analyst has said on Tuesday.
The loss of Iranian oil may mean that producers like Saudi Arabia from the Organization of Petroleum Exporting Countries (OPEC), and Russia, which is outside of OPEC, would need to intervene to stop prices from jumping towards $100 pb, RBC Capital Market's global head of commodity strategy Helima Croft told CNBC.
She added that the intervention would be needed if OPEC did not want to risk losing around 1 million barrels of crude, added to the 1.2 million barrels included in its deal with non-OPEC members.
"This is so interesting. We're back to a situation that we did not anticipate of having to appeal to these traditional allies," Croft told CNBC.
"Because if you reach infrastructure constraints in terms of ability to put additional barrels on the market and you're going to be taking off Iranian barrels — and don't forget Venezuelan production, which has played a huge role in balancing this market — and they (OPEC) could lose a million barrels year-on-year," she added.
In order to avoid a price surge towards $100 a barrel “you have to go back to Saudi Arabia, you have to ask them to put barrels on the market," Croft told CNBC's "Capital Connection" on Tuesday.
For the past several days, oil prices traded near three-and-a-half-year highs.
By 4:03 pm GMT, Brent crude grew 0.54% to $78.65 pb, while US crude (Nymex) shed 0.41% to $70.67 pb.