Oil price rise

LONDON. — The oil price rose yesterday, 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 United States plans to impose new sanctions against Iran, which produces about 4 percent 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 cents to $77,48 a barrel by 1200 GMT, having gained 3,5 percent so far this week.

US West Texas Intermediate crude futures were up 45 cents 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’s founder and chairman Fereidun Fesharaki wrote in a note.

Even without disruption to Iran’s crude flows, the balance between supply and demand in the oil market has been tightening steadily, especially in Asia, with top exporter Saudi Arabia and No.1 producer Russia having led efforts since 2017 to cap output to prop up prices. — Reuters.