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Official cars are seen outside Grand Hotel Wien after a session of meeting of the Joint Comprehensive Plan of Action (JCPOA) on “Iran nuclear deal talks” in Vienna, Austria on May 01, 2021.
Askin Kiyagan | Anadolu Agency | Getty Images

A nuclear deal between the U.S. and Iran could send energy prices higher — even if it means more supply in the oil markets, according to Goldman Sachs’ head of energy research.

While it appears to be contradictory, a deal that brings Iranian barrels back to the market could actually see oil prices rise, said Damien Courvalin, who is also a senior commodity strategist at the bank.

Talks in Vienna are ongoing as Iran and six world powers — the U.S., China, Russia, France, U.K. and Germany — try to salvage the 2015 landmark deal. Officials say there’s been progress, but it remains unclear when negotiations could conclude and oil prices have been seesawing as a result.

A deal would lift sanctions on Iran and bring Tehran and Washington back to complying with the Joint Comprehensive Plan of Action (JCPOA). The U.S. unilaterally withdrew from the nuclear deal in 2018 and reimposed crippling sanctions on Iran which dealt a blow to the Islamic Republic’s oil exports.

If that announcement comes in the next few weeks, in our view, it actually starts that bullish repricing.
Damien Courvalin
head of energy research, Goldman Sachs

Courvalin explained his rationale. He pointed to how oil prices rose in April after OPEC+ said they would gradually raise output from May by adding back 350,000 barrels a day.

“An increase in production … is announced that is above anyone’s expectations — ours included. And yet prices rally, volatility comes down,” he said.

“Why? Because we lifted an uncertainty that was weighing on the market since last year,” he told CNBC’s “Squawk Box Asia” last week.

Investors wondered if OPEC would end up in a price war when it tried to increase production, but the oil cartel presented a “convincing path going forward,” Courvalin said.

“You could argue the same for Iran,” he added. Simply knowing will likely “lift some of that uncertainty.”

“If that announcement comes in the next few weeks, in our view, it actually starts that bullish repricing,” he said at that time.

Opposing views

Other analysts say an agreement could mean lower prices for oil, at least in the short term.

Morgan Stanley said in a research note that an increase in Iranian exports will probably cap Brent crude at $70 per barrel, and expects the international benchmark to trade between $65 and $70 per barrel for the second half of 2021.

Brent crude was lower by 0.13% at $71.22 on Friday in Asia, while U.S. crude futures were down 0.1% at $68.75.

“Our view is that the initial reaction to a potential deal will be a brief sell-off,” Tamas Varga, an analyst at PVM Oil Associates, told CNBC in an email.

Extra Iranian barrels would be a headwind if a deal materializes, according to Austin Pickle, investment strategy analyst at Wells Fargo Investment Institute.

But softer crude prices may only be temporary.

“We suspect accelerating demand and OPEC+’s disciplined supply response will support oil prices,” Pickle wrote in a note, referring to OPEC and its allies.

PVM Oil Associates expects Brent prices to reach $80 per barrel by the fourth quarter of 2021, Varga said.

He also said it will take time before Iran starts to export oil again, and global demand could have improved significantly by the time additional barrels reach the market.

Extra Iranian barrels should only delay price recovery but not throw it off course.
Tamas Varga
analyst, PVM Oil Associates

While the global economic recovery has been uneven — faster in the developed world, compared to the developing world — oil prices will rise more quickly when vaccine rollouts accelerate in Asia, he added.

“Extra Iranian barrels should only delay price recovery but not throw it off course,” Varga said.

S&P Global Platts Analytics has the view that there is room to accommodate Iranian and OPEC+ oil supply growth in the third quarter.

Toward year-end, however, energy prices could come under pressure as Iran exports and U.S. oil production increase, said Nareeka Ahir, a geopolitical analyst at S&P. She said Brent could fall to the mid or low $60s in late 2021 into 2022.

Supply may lag demand

Goldman Sachs sees Brent crude prices rising at a faster pace, and predicts the international benchmark could hit $80 by the third quarter of this year.

Courvalin noted that Asia’s oil demand has been revised lower due to new waves of the virus, and that has been been offset by upside surprises in the U.S. and Europe.

“It really paints a picture where, once vaccination rates progress sufficiently, you really see pent-up mobility get unleashed, and a significant increase in oil demand,” he said. “That’s … the root of the bullish view.”

He said supply will likely lag the pop in demand, and there will be “plenty of room” to absorb oil from Iran.

“In fact, if you told me Iran’s not coming back, our $80 dollar forecast is way too low relative to where the oil market is heading by 2022,” he added.

Concerns over an Iran deal and the pandemic may have “masked a fast-tightening oil market,” Courvalin said.

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Another hydrogen fail as Renault subsidiary Hyvia struggles to survive

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Another hydrogen fail as Renault subsidiary Hyvia struggles to survive

French hydrogen firm Hyvia has been given a stay of execution. The Commercial Court of Versaille has given Hyvia a few extra weeks to get through its insolvency proceedings and find a buyer – but, frankly, it ain’t lookin’ good.

Hyvia began life as a joint venture between French carmaker Renault and American company Plug Power in 2021, but as anyone with more than a social media headline-deep knowledge of hydrogen’s shortcomings as a transportation already know: it’s impossible for hydrogen to compete with BEVs.

The facts surrounding hydrogen fuel cells remain the kind of lessons that people insist on learning the expensive way, however – and companies like Hyzon, Nikola, and even GM seem intent on spending more millions to learn them, even as genuine engineering experts like Mahle insist that the costs (and carbon emissions) of hydrogen remain impractically high for all but the most specialized use cases.

To its credit, Renault seems to have learned those rather expensive lessons about hydrogen well – and has learned so much about hydrogen that it’s committed to a full range of battery electric delivery vans. The French carmaker’s new vans range in size from something like an MPV/minivan on up to a box van and something like one of the Amazon delivery vans built by Rivian called the Estafette E-Tech (below, center).

Renault commercial electric vans

Electric commercial vans, via Renault.

But this article isn’t about Renault’s EVs, it’s about the hydrogen-powered Hyvia brand – and Hyvia doesn’t seem to be long for this world. That hard truth becomes even more obvious when you read the company’s own statement on the matter, which is almost wholly devoid of self-awareness and full of external blame:

For three years, HYVIA, one of the first companies to invest and innovate in hydrogen mobility, has developed an offer, in a market which unfortunately still remains absent.

The too slow evolution of hydrogen mobility ecosystems in Europe and the very significant development costs required for H2 innovation led to this decision.

HYVIA

When I first wrote about Hyzon retreating from Australia’s shores, I noted something interesting: Australia’s commercial BEV sales were booming. The same is true in the US, as well, with Cox Automotive expecting fully 1 in 4 new cars sold this year to be fully electric.

It seems like the market has spoken, then – and hydrogen has lost.

SOURCE | IMAGES: Hyvia, H2.

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E-quipment highlight: Liebherr Liduro Power Port 100 portable equipment charger

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E-quipment highlight: Liebherr Liduro Power Port 100 portable equipment charger

The new Liebherr Liduro Power Port 100 is the company’s newest, smallest battery energy storage system to charge electric construction equipment or power up a mobile office – and it’s coming to bauma 2025.

Access to power on construction sites can be limited or non-existent – even if you’re working for the power company! Liebherr understands this better than most, and they’re developing a series of portable energy storage solutions like the Liduro Power Port (LPO) to make sure electrified job sites can keep the lights on.

Liebherr put the LPO 100 to work by French construction firm CJ Bois, in France, to power a 65 K.1 bottom-slewing crane on a construction site. With access to a standard 2 kW household outlet, the LPO 100 was able to deliver up to 26 kW power up to on-site equipment the next day.

“Available for sale and very soon for rental, Liduro completes our commercial offering,” comments Cyrille Prudhomme, business development manager at Liebherr Distribution and Services France. “(The LPO) enables us to expand our service offering to our customers by providing a concrete response to the electrification of the construction sites and many other applications.”

For their part, CJ Bois seems happy with the Liduro. “We were very pleasantly surprised by how quiet it was throughout the worksite,” says the site manager at CJ Bois. “Compared to an internal combustion engine generator, Liduro significantly improves our working conditions, and we feel less tired at the end of the day. It also facilitates communication on site, which contributes to staff safety.”

Liebherr will bring the LPO 100 to bauma for the first time this year, with customer deliveries set to begin soon after. The company says it can be used with maximum efficiency to supply electricity to fast-erecting tower cranes and small- to medium-sized machines like Liebherr’s own L 507 E compact electric wheel loader.

Electrek’s Take

CJ Bois deploys the Liebherr LPO 100; via Liebherr.

If this concept seems familiar, it’s because we’ve covered something very similar before – the Volvo CE PU (Power Unit) 750 and 130 portable power stations.

As fleets are forced to electrify through a combination of customers’ ESG goals, noise regulations, and environmental regulations (though, probably not American regulations), the need to get usable power to where work is being done becomes a critical variable for fleets to solve for. Solutions like this will help some fleets electrify sooner than later, and that’s why we’re all here.

SOURCE | IMAGES: Liebherr, via Heavy Equipment Guide.

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Two weeks left to win your dream EV in Climate XChange’s raffle. Enter before tickets sell out!

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Two weeks left to win your dream EV in Climate XChange's raffle. Enter before tickets sell out!

Climate XChange’s 9th Annual EV Raffle is your chance to win the electric car of your dreams – but with just two weeks left and fewer than a third of tickets remaining, now’s the time to grab yours!

Imagine designing your dream EV precisely how you want it – every detail customized, up to $120,000, with all taxes covered. That’s the reality for the Grand Prize winner – and it could be you.

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Climate XChange

How it works

Climate XChange, a 501(c)(3) nonprofit, is driving the transition to a zero-emissions economy nationwide – and you can support its mission by purchasing a raffle ticket.

Enter at CarbonRaffle.org/Electrek. Every ticket you buy is one entry to win. Climate XChange is only selling 5,000 tickets, which means your odds are better here than most internet sweepstakes. And with fewer than a third of the available tickets remaining, ensure you don’t miss out on your dream EV!

Plus, you can feel good knowing your ticket supports an amazing cause: pushing for state-level climate action and advancing the transition to a zero-emissions economy.

The last day to purchase a raffle ticket is February 26, or when they sell out.

The prizes

  • Grand Prize: Custom-built EV of your choice, valued up to $120,000, with all taxes covered.
  • 2nd Place: $12,500 cash.
  • 3rd Place: $7,500 cash.

That’s three chances of winning, and no matter how many tickets Climate XChange sells, it will still give away the grand prize EV.

Why enter?

Climate XChange

For nearly a decade, Climate XChange has been turning dreams into reality. Last year’s winner drove away in a custom red Tesla Model X Plaid – and now it’s your turn.

Climate XChange runs a tight ship to ensure a fair and transparent raffle. It prints every ticket stub and live-streams the entire drawing process – including loading the raffle drum – so you can be confident the winners are chosen fairly. It also hires independent auditors to oversee the raffle to ensure that every ticket purchased is correct and entered into the drawing.

BUY YOUR TICKET TODAY at CarbonRaffle.org/Electrek and start daydreaming about what your perfect car will look like!

Who is Climate XChange?

Climate XChange (CXC) is a nonpartisan 501(c)3 nonprofit working to help states transition to a zero-emissions economy. It advances state climate policy through its State Climate Policy Network, connecting over 15,000 advocates and policymakers, and through its State Climate Policy Dashboard, a leading data platform for up-to-date state climate policy information across all US states and major climate sectors.

Climate XChange EV Raffle rules summary

  • Must be 18 or older to enter.
  • Tickets are available at CarbonRaffle.org/Electrek.
  • Only 5,000 tickets will be sold.
  • Grand Prize Drawing on February 28, 2025.

All proceeds support Climate XChange’s work to push for ambitious climate policy – so even if you don’t win, you’re still making a difference.

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