Although Iranian geopolitical risk could ease in the second quarter of 2012, the global oil market remains tight, with considerable risk to both the upside and downside, says international banking giant Barclays in its most recent quarterly Global Outlook.

If the news flow from Iran slows in the second quarter, the bank sees oil prices easing slightly lower, as the decreased threat of a supply disruption would calm traders. However, the tightness in the global oil system – spare production capacity is currently only about 2% of global demand – is likely to persist into the second half of the year, keeping upward pressure on prices. Keep reading →