Oil is expected to trade in the range of $68 to $75 per barrel in the second half of this year, Iraq’s oil minister Ihsan Abdul Jabbar said.
Crude prices will remain in this range if Opec and its allies continue to cut production to support the markets, Mr Jabbar told reporters in Baghdad on Saturday.
There were also “new projects in which there is a common interest" between the country and longstanding investor Exxon Mobil following reports last month that the government is planning to buy the US company’s stake in the West Qurna 1 field, Mr Jabbar said.
"We expect that Exxon Mobil will remain in a certain part of Iraq in some investments, it came out only from West Qurna 1," Mr Jabbar was quoted by Reuters as saying.
Iraq is the second-biggest producer within the Opec group with a total output of 3.96 million barrels per day, according to the latest data from Opec’s monthly oil markets report.
Oil rounded off three straight weeks of gains on Friday with international benchmark Brent settling at $72.69 and US crude gauge West Texas Intermediate closing at $70.91 a barrel.
Crude prices are currently trading higher due to Opec+'s supportive policies and growing demand as business activity resumes amid receding Covid-19 infection rates in major economies.
Monthly oil market reports from the Energy Information Administration, Opec and the International Energy Agency have all painted a supportive outlook for crude oil demand. The IEA now expects global oil demand to return to pre-virus levels by late next year.
Opec left its outlook for global demand growth unchanged for the second consecutive month amid easing mobility restrictions.
Oil demand is expected to grow at 6 million barrels a day with total consumption expected to hit 96.6 million bpd, Opec said in its monthly oil markets report on Thursday.
“While a return of Iran to the global market within a few months potentially could supply the additional barrels required for the remainder of the year, there is no doubt that the Opec+ group of producers currently have the ability and strength to dictate the direction of oil prices," Ole Hansen, head of commodity strategy at Saxo Bank, said in a note on Sunday.
Tehran, which resumed negotiations with the US to reinstate its nuclear deal in April, is looking to conclude talks before its presidential election begins on June 18.
“Estimating a price target on a politically-controlled commodity such as oil is very difficult, and while the risk of a short-term correction exists, the current trajectory points to higher prices with Brent potentially aiming for the 2019 high at $75 [a barrel],” said Mr Hansen.
Demand for jet fuel is also expected to rise as countries reopen borders, according to a report from Kuwait’s Kamco Invest.
Oil companies such as Exxon, BP and Chevron are also planning to curtail capital investment to manage emissions targets and prepare for an eventual slowdown in oil demand globally.
“If the trend continues, the oil market is expected to tighten, even if oil demand sees a decline," Kamco Invest said.