OIL PRICE CRISIS: Donald Trump’s ‘BITING’ sanctions on Iran cause price rise

Lloyd Doyle
August 8, 2018

West Texas Intermediate, the US benchmark for the price of oil, was up 0.8 percent to $69.56 per barrel.

Renewed U.S. sanctions against OPEC member Iran officially went into effect at 12:01 a.m. EDT.

USA sanctions on Iran's energy sector are set to be re-imposed after a 180-day "wind-down period" ending on November 4.

A build in supplies would have a negative impact on the price of oil.

Watch oil trade in real time here.

Brent, the worldwide benchmark, rose 1.3% $74.65 a barrel.

Oil prices rose earlier in the trading session after the USA sanctions on Iran went into effect, but gains were limited as market participants lacked clear signs on just how much the proposed oil sanctions would affect Iranian crude output, Kilduff said. "There is no wish from Saudi Arabia to push prices down to $50".

And further sanctions are set to be imposed by the United States in November.

Crude futures briefly rose in post settlement trade, with WTI at $69.07 a barrel, on data from the American Petroleum Institute that showed US crude inventories fell 6 million barrels last week. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level.

"Anyone doing business with Iran will NOT be doing business with the United States", he added. But with opposition from other signatories of the agreement, especially among European allies, Sayed said it's becoming hard to guess how many barrels will be off the market by November.

Many energy analysts believe new sanctions will remove far less of Iran's barrels than the last time when about half its oil exports were erased from the market as a result of USA and European sanctions. "We are going to work with individual countries on a case-by-case basis, but our goal is to reduce the amount of revenue and hard currency going into Iran", said a senior U.S. administration official on Monday.

"The US is pursuing a strategy to aggressively curb Iranian oil exports by November", UBS analysts led by Giovanni Staunovo wrote in a note.

Admittedly, oil production there is surging from one record high to the next.

After Trump withdrew from the Iran deal, his administration looked to Middle Eastern producers to pick up the slack.

Platts reported that an increase in US crude oil supplies is in part behind the drain in inventories.

But analysts remain widely skeptical Saudi Arabia would raise output by a large enough amount.

Still, with Russian Federation, the United States and Saudi Arabia now all producing 10 million to 11 million bpd of crude, just three countries now meet around a third of global oil demand.

Other reports by Iphone Fresh

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