Oil nears $78, best week in a month

london — The price of oil rose on Thursday, heading for its largest weekly increase in a month, as the market prepared for potential disruption to crude flows from major exporter Iran in the face of US sanctions.

The US plans to impose new sanctions against Iran, which produces about 4 per cent of global oil supplies, after abandoning an agreement reached in late 2015 that curbed Tehran’s nuclear activities in exchange for removal of US and European sanctions.

Brent crude futures rose 27¢ to $77.48 a barrel by 1200GMT, having gained 3.5 per cent so far this week. US West Texas Intermediate crude futures were up 45¢ at $71.59.

The oil price is at its highest since late-2014 and on track for its fourth consecutive quarterly gain, the longest such stretch for more than 10 years. Analysts had little hope that opposition to the US action would prevent sanctions from going ahead.

“Europe and China will not fight against the US sanctions. They will grumble and accept it. There is no one who will realistically choose Iran over the US,” said energy consultancy FGE.

“We believe the previous 1 million bpd limit for exports [imposed during previous sanctions] will be reimposed. As before, it may take several rounds of reductions to reach target levels,” FGE founder and chairman Fereidun Fesharaki wrote.