Goldman Sachs: neither OPEC nor Iran is a problem. Oil prices are just "rising speed", not "rising and falling".

As OPEC+ announced its decision to gradually increase production, the attention of the crude oil market turned to Iran's nuclear talks.

The US State Department says it is preparing to lift sanctions against Iran in order to resume the Iranian nuclear deal. This caused a panic in the crude oil market: the structure of supply and demand is about to change again? Is there going to be a new shock?

Do crude oil analysts need to tear up the report? At least not Goldman Sachs.

Jeffrey Currie, global head of commodities research at Goldman Sachs, and others believe that an Iran nuclear deal is unlikely to be reached before next summer, and even if it is reached ahead of time, it will not change their optimism about the market in the coming year, because the increase in OPEC production is likely to dispel market expectations caused by the return of Iranian crude oil supply before next year.

Goldman Sachs maintains its view that Brent oil prices will average $75 a barrel by the end of this year and next. However, if Iranian crude oil exports resume this year, oil prices are expected to fall to $70; if the Iran nuclear deal is reached next year, oil prices could rise to $85.

Don't worry about OPEC increasing production.

In Goldman's view, OPEC's withdrawal of production cuts and production plans have so far been carried out in an orderly manner, so although their decision came faster than the market expected, the market reaction was not very strong.

Not only that, from the demand side, global consumption is still in a sustained recovery, and demand will increase significantly this summer.

And you don't have to worry too much about Iranian exports.

Supply-side concerns are now concentrated in Iran, where there is a high probability that Iranian oil will be re-exported to the international market as Iran's nuclear talks resume.

In this regard, Goldman Sachs believes that this concern is not unreasonable, although the normalization of Iran's oil exports has become a market consensus, but the agreement will still take time, may take several months. Just look at the focus of the debate on the negotiators: Iran demands that the United States lift sanctions first, while the United States demands that Iran first re-abide by the previous comprehensive agreement on Iran's nuclear issue, which is considered unacceptable by Iran.

The last time an Iran nuclear deal was reached was in 2015-2016, when it took about six months.

Moreover, Iran will hold a presidential election in June, which may disrupt the process of Iran's nuclear negotiations, and the interference is likely to continue into the first half of next year.

In addition, media reports say the United States is trying to include a "stronger and longer-term" follow-up negotiation agreement into the agreement. This may be the crux of the negotiations because Iran opposes such a move.

To say the least, even if the Iran nuclear deal is reached, the normalisation of Iranian oil exports will not have much impact on the market, nor will Goldman change its relatively positive view of the crude oil market by the end of 2022.

The relatively obvious impact of the uncertainty about the timing of the Iran nuclear deal is that there is an asymmetric risk in Goldman's Brent crude forecast path.

If Iran's nuclear deal is reached this year and Iran's crude oil exports return to normal this year, oil prices will not rise as much as they expected, perhaps only $5, meaning an average price of $70 a barrel at the end of the year.

If reached by the middle of next year, oil prices could rise by more than $10, with an average price of $85 a barrel next year.

Basic expectations remain unchanged

Iran's nuclear talks have just resumed, and the entire crude oil market has not changed much, so Goldman Sachs maintained its previous oil price expectations.

The established Wall Street bank said crude oil production would remain at its current level until the second quarter of 2022, which could increase by 900000 barrels a day by the end of the year.

However, with the resumption of negotiations, 20 million barrels of floating storage stocks will be released in the next six months.