Iran's nuclear negotiations restart the epidemic and add chaos, supply and demand imbalance in 2022 or the theme of the oil market?

On Monday (December 27) in the European market, international oil prices fell slightly, and U.
S.
crude oil futures fell more than 1.
3%.

Due to the pandemic, there are renewed fears that the Omicron variant could slow the economy in the
new year.
At the same time, the resumption of negotiations on the Iran nuclear deal has pushed the risk
of a significant increase in Iran's crude oil supply.
However, in the last week of 2021, market trading was light, limiting the decline in oil prices
.
Oil strategists expect more challenges
in oil supply and demand in 2022.

Thousands of flights were canceled in the United States, and pandemic fears lingered

American Airlines has canceled or postponed thousands of flights in the past three days due to staff shortages caused by the pandemic, while several cruise ships have had to cancel stops
after the outbreak.
This poses a threat
to the nascent rebound in jet fuel use.
At the same time, the number of new crown infections in France has once again set a new record, and the government will hold a special meeting on the 8th, and new movement restrictions may be introduced
.

Anthony Fauci, U.
S.
President Joe Biden's chief medical adviser, said that while there is evidence that the symptoms of this new variant may not be as severe, Americans should be wary of the new variant because the number of cases can still overwhelm hospitals
.

Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte, said: "Even though Omicron is less virulent, its contagious nature seems likely to disrupt the flow of goods and services as workers are quarantined
.
This means that the level of oil consumption will fall.

"

Jawaid Afsar, sales trader at Securequity, said: "Going into 2022, we will still face pandemic uncertainty, but the good news is that, according to WHO, we may see the end
of the pandemic by the end of the year.
He added that markets will have to deal with other issues in 2022, such as
Paul's inflationary pressures, policy tightening and geopolitical risks.

The Iranian nuclear negotiations are about to restart, and there may be new progress in the resumption of the agreement

To salvage Iran's 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), talks with world powers will resume
in Vienna on Tuesday at 0:00 Beijing time (17:00 GMT), state media reported.
Iran's foreign minister said Iran's nuclear talks would focus on lifting all U.
S.
sanctions to guarantee Tehran unhindered oil
exports.

Iranian Foreign Minister Hossein Amirabdollahian said: "The most important issue for us is that, first of all, Iranian oil can be easily sold
without hindrance.
The money from the oil (sale) will be deposited in Iranian banks in foreign currency so that we can enjoy all the economic benefits
stipulated in the JCPOA.
”

After 2018, Iran's main source of revenue, oil exports, fell
sharply under U.
S.
sanctions.
Tehran did not disclose data, but according to assessments from shipping and other sources, oil production fell to 200,000 b/d from about 2.
8 million b/d
in 2018.
Another survey showed the country exported 600,000 barrels
per day in June.

Iran's nuclear talks, which were interrupted for five months after the election of hardline President Raisi, resumed last month
.
Since then, little progress has been made in the negotiations
.
"Today, there is already an acceptable joint document on the table, December 1 and December 15
," Hossein said.
Both documents are related
to nuclear issues and U.
S.
sanctions, he said.
Hossein said: "Starting today, our negotiations will begin
on the basis of this joint document.
Assurance and verification are among the
issues on the agenda.

The market is facing an imbalance between supply and demand, and oil producers may face more challenges in 2022

On Monday (Dec.
27), oil strategist Julian Lee said he expected more turmoil
for oil producers in the coming years.
The epidemic has not been eliminated
.
The emergence of a new variant of Omicron last November caused oil prices to plunge again, and countries are seeking to contain its spread
.

Li expects that in the near future, OPEC may face an oversupply situation again, and the need to cut production again is increasing
.
At the same time, oil producers are under pressure from consumers who, fearing soaring inflation, are demanding that they keep their exports flowing
.
But assuming demand continues to recover, it won't be long before the main concern becomes OPEC's ability to meet oil consumption, even as countries around the world try to transition
away from fossil fuels.

Lukoil PJSC, Russia's second-largest oil producer, said its spare capacity would run out
in April if OPEC+ continued to add 400,000 barrels of oil per month.
Saudi Energy Minister Prince Abdulaziz bin Salman warned that the world would face a supply gap
of 30 million barrels per day by 2020.

With several OPEC+ members already unable to meet their output targets and others, including Russia, rapidly approaching capacity, the group may soon need to work to increase output to balance the market
.