Potential market impact from ‘maximum pressure’ US sanctions on Iran?

Based on our data, if these were enforced with stricter vessel sanctions, Iranian oil exports could drop by around 500, 000 b/d, bringing total exports down to roughly 1 million b/d. In theory, this would also create more room for OPEC+ members to increase production. However, If the US is serious about implementing these sanctions, they’ll need to target vessels more aggressively. And the key issue is then China – if purchases of Iranian barrels by independent teapot refineries can’t be controlled, any sanctions won’t have a big impact.

Is the oil market still underestimating geopolitical risk?

The market has not been particularly sensitive to supply disruptions for some time now. Instead, the focus has been on bearish factors - Trump’s tariffs, the potential restart of the Kurdish-Turkish pipeline which could add 180, 000 b/d, and non-OPEC+ supply growth which is widely expected to outpace demand.

How much is fear of losing market share driving OPEC+ policy?

There was concern within OPEC+ - particularly among members making voluntary cuts - that their market share was being eroded, especially in key growth markets like Asia. To maintain cohesion within the group, they had to ensure that no single member was disproportionately affected. Additionally, compliance has been an issue. Countries like Kazakhstan, Russia, and Iraq have been exceeding their quotas, not fully compensating for overproduction. This has created an unfair situation with compliant members bearing the burden. The small, structured supply increases from April are an attempt to balance these dynamics in a more organized way.

Outlook for oil prices?

Our forecasts, for now, suggest Brent will remain between $70 and $75 for the rest of the year. Upside risks could include additional sanctions, supply disruptions, or non-OPEC supply failing to meet expectations. If prices dip below a certain point, that could impact US shale production; many are of the view that the "drill baby drill" mindset requires a minimum Brent price of $65–$70, if not higher in some regions, to justify new drilling.