Gulf oil producers are hopeful for a turnaround in 2021, especially that the COVID-19 vaccine will mean increased demand for energy from consumers as economies get back to normal. But a return to normalcy may take until mid-2021, as time is needed for populations to be vaccinated and a new, even more contagious strain of the coronavirus may signal that things may get worse before they get better. And then there’s the possible return of Iranian oil to market, if the Iran nuclear deal is back in force, which could depress prices.

The “big unknown” for oil markets that could cause “short-term pains” for Arab Gulf producers in 2021 is a new coronavirus strain first detected in the United Kingdom, said Colby Connelly, an analyst at Energy Intelligence, a leading provider of energy news and analysis.

Global oil demand could remain depressed longer than initially anticipated as the world cuts air ties with the United Kingdom and several countries brace for renewed lockdowns. “Most of the good news will probably come in the second half of 2021,” Connelly told Al-Monitor.

Brent prices will average $49 per barrel in 2021, the US Energy Information Administration estimated. It is still well below the $68 a barrel that Saudi Arabia needs to balance its budget, which forecasts a drop in public spendings by about 7% next year.