Oil stocks in the spotlight amid tensions in Iran; Tenaris and Eni are on the rise
Another factor boosting the ‘Six-Legged Dog’ is the strengthening of its presence in Latin America, in light of the major agreement between the United States and Venezuela on oil extraction
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(Il Sole 24 Ore Radiocor) - Crude oil prices are rising again, buoying oil stocks: on the Milan Stock Exchange, Tenaris, Eni and Saipem , in Paris TotalEnergies, whilst Repsol is leading the way in Madrid. Oil prices have surged again in the wake of fresh clashes in the Strait of Hormuz, following the US attack on the Iranian island of Larak, which prompted a retaliation by Tehran against US targets in Jordan. The November futures contract on Brent briefly touched $91 a barrel (its highest level in about a week) before the rally slowed.
Eni is also benefiting from the strengthening of its presence in Latin America, in light of the major agreement between the United States and Venezuela on oil extraction. Over the weekend, in fact, the company with the six-legged dog logo reported that it is working with the Venezuelan authorities to help revive the country’s energy sector. This also includes possible new developments for the Junin-5 and Corocoro oil projects, following the recent agreement to export gas from the Perla field in the Gulf of Venezuela. Eni is also consolidating and expanding its offshore presence in Uruguay. Together with Miwen (a wholly-owned subsidiary of YPF) and the Uruguayan national oil company Ancap, it has formalised its entry into the Off-5 exploration block, having obtained approval from the Uruguayan authorities. At the same time, Eni has recently reached an agreement to acquire a 40 per cent stake in the adjacent Off-6 block, operated by Apa Corporation.
“Uruguay represents primarily a long-term exploratory option, whilst Venezuela has potentially more significant and immediate implications,” comment Itnermonte analysts, emphasising that “new agreements could therefore enable an increase in production and the monetisation of existing assets, although the economic potential remains heavily influenced by the political landscape and US restrictions”. The ‘Neutral’ recommendation on the share has been confirmed, with a target price of 23 euros.
