Oil prices up sharply

Vladimir Putin’s decision to recognise the pro-Russian separatist provinces in eastern Ukraine and to send troops there has added a new dimension to the crisis that has been shaking the region for several weeks. Western economic sanctions will fall against Russia and the price of hydrocarbons exported by Russia continues to rise. The price of Brent 1st-nearby is now approaching $98/b and the prompt spread (between the first two futures contracts) is reaching new heights.

The Iranian authorities have confirmed that negotiations on the nuclear issue have progressed well but that an agreement is stumbling on the 2-3 most difficult points and in particular on the fact that Iran would like this agreement to be irreversible (especially in view of a possible return of Donald Trump to the White House). In the current context, in any case, an agreement paving the way for a return of Iranian oil to the market would probably have little impact on crude prices.