Oil prices rise as Iran’s crude exports decline

london — Oil prices rose on Tuesday on growing evidence of falling crude exports from Iran, Opec’s third-largest producer, before the imposition of new US sanctions and a partial shutdown in the Gulf of Mexico due to Hurricane Michael.

Brent crude rose 65 cents to $84.56 a barrel by 10:50am EDT (1450GMT). The global benchmark hit a four-year high of $86.74 last week but slipped as low as $82.66 on Monday.

US West Texas Intermediate (WTI) crude futures gained 36 cents to $74.65 a barrel.

“The oil market mood is exceptionally bullish, with fears growing that the US demands for an Iran oil embargo could cause a significant supply shortfall,” said Julius Baer commodities research analyst Carsten Menke.

Iran’s crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers sought alternatives ahead of US sanctions that take effect on November 4.

Iran exported 1.1 million barrels per day (bpd) of crude in that seven-day period, Refinitiv Eikon data showed. An industry source who also tracks exports said October shipments were so far below one million bpd.

That is down from at least 2.5 million bpd in April, before US President Donald Trump in May withdrew the United States from a 2015 nuclear deal with Iran and reimposed sanctions. The figure also marks a further fall from 1.6 million bpd in September.

Saudi Arabia, the biggest producer in the Organisation of the Petroleum Exporting Countries, said last week it would increase crude output next month to 10.7 million bpd, a record.

“Iranian barrels are declining fast, and Saudi Arabia’s promise to balance will face a reality check in a month’s time,” JP Morgan analysts said in a note.

Meanwhile, oil companies operating in the Gulf of Mexico shut down nearly 20 per cent of oil production as Hurricane Michael moved towards eastern Gulf states including Florida.

If forecasts prove accurate, the hurricane would largely miss major oil-producing assets in the Gulf, analysts said, but a change of track could widen the impact.