Already shaken by excessive volatility, the oil market may become even more volatile in the coming months, according to JTD Energy Services chief strategist, with geopolitical disruptions that drive prices up.
"It's almost like in 2011, when (Libya's former dictator Muammar Gaddafi) was overthrown. If … Libya comes into play, it will only add to the market's grip," John Driscoll told CNBC.
The situation in Libya rose surprisingly quickly last week when the Libyan National Army, a formation affiliated with the government of eastern Libya, launched an attack on the UN-recognized cabinet in Tripoli. The attack followed a statement by LNA leader General Khalifa Haftar that Libya will soon have a single government, which has sparked hopes of a negotiation between the two rival governments.
Of course, Venezuela and Iran remain the usual suspects when it comes to short-term oil price projections, with US sanctions targeting the oil industry of both countries as a regime change tool.
"Things are terrible there [in Venezuela]Driscoll said. "Oil production is plummeting, so you have this wave of power outages that halved your exports."
In fact, the latest shipment data from Reuters and TankerTrackers.com revealed that Venezuela's oil exports in March remained surprisingly stable in February despite the series of blackouts at a daily rate of around 900,000 bpd.
As for Iran, the analyst said that Washington's goal of reducing the country's oil exports to zero was "unrealistic" and "possibly even delusional," adding that the more prices rose, the more demand would be for Iranian oil and an outlet .
Brent passed the $ 70 mark per barrel for the first time in months a few days ago and now, thanks to Libya's new one, it continues to rise. According to Driscoll, the price recovery will not be as short as he predicted a month ago, thanks to events in Libya, Iran and Venezuela.
By Irina Slav for Oilprice.com
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