It is not possible to completely replace Russian Oil supplies in any case, which is why effective sanctions would lead to significantly higher Oil prices, Commerzbank's commodity analyst Carsten Fritsch notes.

Sanctions against Iran are now the most far-reaching since 2018

"OPEC+'s spare production capacity is probably around 4 million barrels per day after the voluntary production cuts were reversed. It's unlikely that Saudi Arabia will decide to use this and boost production above the agreed level. This would jeopardize the close cooperation with Russia that has developed over many years and thus also undermine the existence of OPEC+."

"It is also unrealistic to assume that the US will be able to fill the resulting gap by significantly increasing its production. US crude Oil production did reach a record level of 13.49 million barrels per day in May. However, according to the latest forecast by the US Energy Information Administration, it is not expected to rise further until the end of 2026. Any increase would also only be gradual, depending on the price level."

"Additional Oil supplies could theoretically reach the market from Iran if a new nuclear agreement is reached and sanctions are subsequently lifted. However, this is not particularly realistic at present. The US even further expanded its sanctions this week, adding 115 more individuals, shipping companies, entities, and vessels in 17 countries to the sanctions list for involvement in circumventing previous Iran sanctions. According to the US Department of the Treasury, the sanctions against Iran are now the most far-reaching since 2018."