At the moment all eyes are on the uncertain political conditions in the Euro area and Saudi Arabia flooding the market with oil. Until Iran and the P5+1 countries meet on 23 May, we believe oil prices will remain elevated. But as we move into Q3 and demand seasonally rebounds we expect oil prices to pick up steam.

When South Sudan finally gained independence from Khartoum, we warned against the risk of increasing political tension as several critical issues had not been resolved before the separation. Unfortunately we were too right in our warning.

Oil prices fell by more than 1% this morning following talks between Iran and the so-called P5+ 1 countries. After more than a year without negotiations the restart of talks has raised hopes that Iran and the West will finally be able to strike a deal over Tehran’s nuclear programme.

Higher petrol prices are weighing on demand, and US petrol demand for Q1 is down by 5.6% compared to last year.

Oil prices have been pushed up by around USD 10/barrel this year by the introduction of Iranian oil sanctions and the risk of an Israeli attack on Iran’s nuclear facility.

Politcal tension pushes oil prices to new highs, Obama is struggling with high petrol prices before the election and shale oil production is booming in the US. A discussion of Nordea’s updated oil prices forecast and risk scenarios.

Drive slowly – don’t rush if you are going to your holiday home this Easter – petrol prices are expected to remain high.

Oil prices are expected to remain high over the forecast period as the EU/US sanctions and oil embargo targeting Iran’s oil exports and economy will continue to be a bullish factor for oil prices through a tightening of oil fundamentals and elevated geopolitical risk.

Updated trade figures published today show that China has cut imports of Iranian crude by 45% m/m or around 290k b/d in February.

High and increasing oil prices could jeopardise the economic recovery and reduce the chances of President Obama being reelected. The sharp upswing in oil prices is also a major concern for other net oil-importing countries.