Some may try to reach a logical explanation for the rise in oil prices during the past period. We can identify two main reasons for the rise in oil prices during the last period. The first reason is what political analysts have reached in terms of the lack of opportunity to reach a new Iranian nuclear agreement, meaning that Iranian oil will remain. Away from the markets for an unknown period
The second reason is the increase in risk appetite with the arrival of a new vaccine.
But it seems that the two reasons are somewhat ambiguous, which has led to a violent fluctuation in the markets during the past days. While oil prices fell 4.6% on Monday, the largest daily drop since March 23, what explains this is some hope of reaching a solution regarding the Iranian nuclear program.
Also, the resurgence of Corona infections again had a negative impact on oil prices
In addition, the OPEC agreement last week was negative for oil prices
But what if there is positive progress on talks with Iran?
With the increasing number of Covid-19 cases, the market will be able to absorb a possible increase as a result of the return of Iranian oil to the markets. Prices will not be affected much, and may even tend to decline.
The talks in Vienna between Iran, the United States and the remaining members of the 2015 nuclear deal aim to revive the deal, which could pave the way toward lifting sanctions on Iran's oil exports.
We do not forget that oil rose 22% during the beginning of 2021, affected by the wave of optimism associated with the production of the Corona vaccine
But the oil gains did not last long with the return of Corona's injuries, and the latest OPEC agreement, while it does not seem that the 2.7 million barrels per day, which are Iranian production levels, will be able to make any change.
So far, the recent OPEC agreement in addition to the Corona pandemic are the most pressing factors on oil prices, and we cannot expect a rise to 66 before reaching a solution to the Corona pandemic, in addition to OPEC changing its production policy that prefers to preserve its market share more than it prefers to preserve prices.