Total chief predicts $100 a barrel later this year

Total chief predicts oil to reach $100 a barrel 'in a few months'
2 min read
17 May, 2018
The price of oil is set to skyrocket due to potential US sanctions on Iran, the head of French energy giant Total has said.
Total chief Patrick Pouyanne fears oil prices will reach $100 very soon [AFP]

Oil could reach $100 a barrel in just a few months due to US sanctions on Iran, the head of French energy giant Total said on Thursday.

CEO Patrick Pouyanne predicts a huge hike in prices in the coming months, largely due to a decision by US President Donald Trump to pull out of a nuclear deal with Iran and issue far-reaching sanctions on Tehran.

US officials have warned that new financial penalties could be extended to Western companies investing in Iran. This has led to uncertainty from European multinationals - such as Total - about their future in the crisis-hit Middle East state.

"We are in a new world. We are in a world where geopolitics are dominating the market again," Pouyanne said.

An agreement between Saudi-led OPEC and Russia on cutting oil production has helped push the price of oil from below $30 in 2016 to hit $80 on Thursday - the highest in nearly four years.

"OPEC and Russia have been implementing their policies efficiently," he told a think tank in Washington.

"And on top of it, you have the announcement on Iran, which is pushing the price up. So I wouldn't be surprised to see $100 per barrel in the coming months."

New US penalties on Iran could spell disaster for European businesses looking to take advantage of the lifting of sanctions on Tehran, following the 2015 nuclear deal, and enter a market of more than 80 million people.

Total warned on Wednesday it might have to abandon a multi-billion gas project on Iran if US sanctions go ahead.

Other European companies have voiced similar concerns.

Saudi Arabia said this week it might continue with oil production cuts, as a glut in the market nears an end.

Agencies contributed to this story.