Oil near 4-year peak ahead of Iran curbs

$84.98 Per barrel was the price of Brent futures in London

london — Oil prices steadied near their highest since November 2014 on Tuesday as markets braced for tighter supply once US sanctions against Iran kick in next month.

The international crude oil benchmark was flat at $84.98 per barrel by 1344 GMT after reaching a new four-year high of $85.45 in the previous session.

US West Texas Intermediate (WTI) crude futures were up 11 cents at $75.41 a barrel, having hit a four-year high of $75.91 earlier in the session.

Brent and WTI have roughly tripled compared with lows seen in January 2016, when the Organization of the Petroleum Exporting Countries and allies led by Russia started to curb oil supplies to rebalance an oversupplied market.

Sentiment was lifted by a lastgasp deal to salvage Nafta as a trilateral pact between the US, Mexico and Canada, rescuing a $1.2 trillion a year open-trade zone that had been about to collapse.

More fundamentally, oil markets have been pushed up by looming US sanctions against Iran’s oil industry, which at its most recent peak this year supplied nearly three per cent of the world’s almost 100 million barrels of daily consumption.

A Reuters survey of Opec production found Iranian output in September fell by 100,000 barrels per day, while production from the group as a whole rose by 90,000 bpd compared with August.

“Oil prices continue to climb, supported by the nearing Iran embargo and related supply concerns,” said Norbert Ruecker, head of commodity research at Swiss bank Julius Baer.

HSBC said in its fourth-quarter Global Economics outlook that “our oil analysts believe there is now a growing risk it (crude) could touch $100 per barrel”.

Washington’s sanctions start on November 4. Many analysts say Opec will struggle to cover a decline in exports from Iran.

“The general impression out there currently seems to be that there is either an outright inability or at least a certain unwillingness ... to compensate for the expected continuation of declining Iranian export flows,” Vienna-based consultancy JBC Energy said. —