Paydirt! Sweden Expects Oil Prices to Soar, Boosts Trade With Iran

The average oil price in 2016 will hover at 45 dollars per barrel, Swedbank expects. With it rising to 60 dollars per barrel on average next year, reported industry newspaper Affärsvärlden.

Swedbank's forecasts imply an oil price of just over 50 dollars by the end of this year and close to 70 dollars at the end of 2017.

"Expectations of higher oil prices generate higher oil production, which is why the actual rise could be more modest than we forecasted, especially next year," warned Swedbank.

The bank said that the global oil industry's heavy investment cutbacks, together with the rising demand for crude oil, are expected to dramatically reduce the surplus of oil during 2016-2017.

"Already during the second half of the year, the oil market can reach balance, as the last year yielded a surplus equivalent to 2 million barrels per day," wrote Swedbank.

The upward trend in the oil market has prompted Sweden to re-kindle its trade relations with Iran, which is one of world's major crude oil producers. Following the removal of the international sanctions on Iran, Sweden is all set to open a new trade office in Tehran to facilitate mutual trade, despite Stockholm constantly raising concerns about Iran's violation of human rights and failure to comply with Western democracy.

"It is a very important step, now that the sanctions are lifted, to establish a stronger presence to help Swedish companies in place. Before the sanctions were imposed, Iran had been one of our main trading partners, which later changed," Enterprise Minister Mikael Damberg commented to Svenska Dabladet.

According to Damberg, Iran's interest in Western-quality products is great, which paves the way for possible investments in mining, infrastructure and consumer products. The minister also highlighted the fact that one percent of Sweden's population of roughly 10 million actually are of Iranian descent.