Oil prices slipped from an 11-year high yesterday to US$110.10 ($150.48) per barrel on speculation that a deal on Iran’s nuclear program could be signed within days.

It comes after an Iranian energy journalist Reza Zandi tweeted on Thursday that a deal could be signed within the next 72 days.

This appeared to have received some backing from the International Atomic Energy Agency, which said that its chief Rafael Grossi will visit Tehran on Saturday in an effort to resolve outstanding issues.

If true, this would add a significant quantity of oil (up to 1.3 million barrels per day) to the market, which has been struggling to secure new supplies amidst concerns about OPEC’s ability to boost production and the ongoing uncertainty caused by Russia’s invasion of Ukraine.

While this is just a little more than 10% of what Russia produces, Iranian oil could still play a role in reducing dependence on Russian exports.

Iran had previously reached a deal in 2015 that restricted its ability to develop nuclear weapons in exchange for lifting economic sanctions before the agreement was abandoned by former US president Donald Trump in 2018.

Oil prices are already surging back up

However, consumers shouldn’t start celebrating just yet as it didn’t take long for the benchmark Brent crude to regain ground. Brent crude is now trading at about US$113.20/bbl.

Russian oil is already finding it hard to find customers with the BBC quoting UK-based research consultancy Energy Aspects as saying that almost 70% of Russian crude oil cargoes do not have a buyer.

It added that oil trader Trafigura offered a cargo load of Russian crude oil at a record discount of $18.60 per barrel below the market rate for Brent, but could not find a buyer willing to take the risk.

A move by IEA member countries to release 60 million barrels of emergency stockpiles earlier this week only had a limited impact on prices.

European gas hits new all-time high

Meanwhile, European gas prices have continued to climb on concerns that Russia might turn off the taps – a major fear given that it supplies 40% of Europe’s gas.

The benchmark Dutch TTF hub soared to a record high of US$221 per megawatt hour, or the shocking equivalent of about US$360 per barrel of oil equivalent.