(Reuters) - Bank of America Merrill Lynch said on Friday the United States, in the runup to midterm election, is unlikely to take a “hard stance” against Iran, resulting in international benchmark Brent crude to average $70 a barrel in 2018.
Iran, the third-largest producer of Organization of the Petroleum Exporting Countries, is facing U.S. sanctions on its oil exports that are prompting some buyers to cut purchases.
“The administration may look for an easy win on trade to appease markets and voters alike before November,” BofA said in a research note.
Brent was down 0.7 percent at $73.91 on Friday as Libyan ports reopen and amid hopes Iran will still export some crude despite sanctions.
Oil approached $80 in June and early July due to Libyan and Venezuelan supply disruptions and on fears the United States would press all buyers of Iranian oil to cut imports to zero from November.
While Trump has accused the oil cartel of driving up prices, Iran says the United States has caused this by imposing sanctions on it and Venezuela. (reut.rs/2zBvQya)
BofA had previously said cutting Iran exports to zero could push up oil by $50 a barrel, if top producer Saudi Arabia cannot keep up production.
Reporting by John Benny in Bengaluru; Editing by Arun Koyyur