Elevated geopolitical tension between Saudi Arabia and Iran could soon threaten the unity of an OPEC-led pact to keep oil prices in check, according to one commodity strategist.
“Saudi Arabia-Iran tensions appear to be intensifying. While this provides a geopolitical premium in oil for now, it could develop cracks in OPEC’s unity, which could end the pact prematurely,” Nitesh Shah, commodities strategist at ETF Securities, said in a research note Tuesday.
Saudi Arabia and Russia have led an ongoing effort by OPEC and other allied oil producers outside the cartel to try to clear a global supply overhang. The output cuts, expected to remain in place until at least the end of 2018, have helped to lift crude prices over the past 12 months. […]