(Bloomberg) --Initial steps taken by U.S. President Joe Biden’s administration may help support the oil market this year and next, according to Goldman Sachs Group Inc.

A focus on fiscal spending, a probable lack of urgency in lifting sanctions on Iran and restrictions on the North American energy industry all combine to support oil prices, analysts including Damien Courvalin and Jeff Currie wrote in a note dated Jan. 21.

Oil markets have already been rallying since late last year as the start of vaccine rollouts worldwide spurred prices to mult-imonth highs as investors looked ahead to a normalization in fuel consumption. Providing a demand boost in the form of additional fiscal stimulus would allow oil prices to maintain their upward momentum.

At the same time, supply growth is in check as shale producers focus on improving their finances and Saudi Arabia pledged to cut oil output in the next two months to help rebalance the market. Meanwhile, a quick return of embargoed Iranian barrels into the market doesn’t seem likely.

“The new administration’s focus on reaching bi-partisan policy support suggest a lessened incentive to quickly revisit the divisive Iran nuclear deal,” the note said. “Delays in a full return of Iran production would reinforce our bullish oil outlook since we already forecast a tight 2022 crude market with low OPEC spare capacity.”

Goldman Sachs raised its estimates for additional fiscal spending to $1.1 trillion from $750 billion after Biden released his virus-relief plan. A $2 trillion stimulus package in 2021 and 2022 could boost U.S. oil demand by roughly 200,000 barrels a day and further contribute to a weakening dollar, which increases the appeal of commodities priced in the U.S. currency.

The bank doesn’t see the 60-day moratorium on oil and gas leases and drilling permits on federal lands having an impact on near-term producer activity. But it highlights the new administration’s climate plan priorities, which will increase production and financing costs long-term. A broader moratorium and Biden’s move to block the Keystone XL project point to a similar regulatory shift, the analysts said.