OPEC has spent the past year pulling prices from historic lows. It is only recently that it started to cautiously increase supply, but according to latest assessments, there is now a deficit in the oil market.
Allowing it to continue could undermine the recovery, but permitting Iran to boost its output is also risky.
OPEC has already planned to increase production to 841,000 barrels per day starting July, and this will continue until April 2022. But due to the rapid increase in demand, the scale might be renegotiated.
Iran's possible return to international oil markets is also a worrying issue.
The Islamic Republic is negotiating the renewal of the 2015 nuclear deal in exchange for easing US sanctions. If an agreement is concluded and Washington relaxes sanctions, Iran could raise output to 4 million barrels a day.
In any case, IEA Executive Director Fatih Birol said the shortage in the oil market will already be evident next month, and if supply does not increase, prices will soar. However, hitting new all-time highs is not good news, as it means that the market is overheating.
Technical analysis show that a false breakout occurred in the daily chart.
