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The price of crude oil recovered on Monday defying
the worst-case scenarios as the world still needs oil to function in a normal
way. As of 15:00 GMT, the prices of WTI and Brent were $71.88 and $75.77 respectively.
Most analysts hoped that the prices would recover
gradually; many, however, did not believe the initial recovery - by over 5% - would be that swift.
Usually, the oil price recovers slowly in the event
of a big crash like what we saw on Friday. This time, however, the prices
recovered from the precipitous fall in just two days.
There are two possible factors behind the quick
recovery: the Omicron variant of the coronavirus, according to the South
African doctors who discovered it, is not as deadly as initially feared; the
other was the evaporation of hope of a possible breakthrough in the current
talks on reviving the JCPOA in Vienna, Austria.
Although the talks between Iran and the signatories
to the JCPOA, 2015 Iran nuclear deal, started on Monday, the hope for a quick resolution
was dashed by a joint statement issued by the British Foreign Secretary and her
Israeli counterpart on the eve of the new round of negotiations, in which the
former made the British position clear with regard to the Iranian position on
the issue.
Referring to the article, a spokesman of the Iranian
foreign ministry condemned the move by Israel to derail a potential, successful
outcome of the talks.
Although Iran expects a success during the talks, it
has been accusing the US of derailing the very goal, placing lots of obstacles
along the path to the goal.
On the part of Iranians, they want a binding
agreement that does not change from one administration to another – in a matter
of 4 years when the occupation of the White House changes from the Republicans
to the Democrats – a major bone of contention between the two sides.
The postponement of the OPEC+ meetings by one day
may have also stemmed from the same development. The concerns of the main
players of the OPEC+ must have been elevated when Iranian officials of the oil
industry sounded optimism while highlighting how much Iran can contribute to the
global supply in the event of the sanctions against it being lifted – something
that the desperate US administration likes to hear about.
Iran simply wants to sell as much oil as possible in
the shortest period of time to boost is coffers; Iran has to address a catalogue
of economics and social issues as a matter of urgency, especially in the
aftermath of the Coronavirus crisis.
The Iranian factor may already have been under discussion
by the key players of the OPEC+. By mid-week, we may be able to get a sense of
the way OPEC+ is going to deal with it in the near future.
