Oil prices rose more than 2% on Wednesday. Brent hit a three-and-a-half-year high after US President Donald Trump abandoned the nuclear deal with Iran and announced the “highest level” of sanctions on the OPEC member. Brent crude traded for $76.87 a barrel, climbing $2.02 or 2.7 percent, after jumping earlier in the session to its highest level since November 2014, at $77.43 a barrel. US crude oil futures rose by $1.79 or 2.6%, to trade at $70.85 a barrel.<\/p>\n
Prices rose after data from the US Energy Information Administration showed that US crude inventories fell 2.2 million barrels last week, exceeding expectations of a 719,000 bpd drop. In China, Iran’s biggest oil buyer, crude futures in Shanghai posted their highest levels since they were launched in late March, to break above $73.20 a barrel.<\/p>\n
Analysts attributed the strong price rise to an expected drop in Iran’s oil exports, and noted that Iran’s oil exports to Asia and Europe would certainly fall later this year and in 2019, as some countries sought alternatives to avoid trouble with Washington and with the onset of sanctions. As part of the withdrawal, the United States will reinstate sanctions targeting Iran’s oil sector, shipping and international financial transactions to Iran by November. “With this risk in place, there are expectations that there will be a sharp drop in Iranian crude oil purchases by all parties over the next two months,” the experts said.<\/p>\n
It is expected that between 500,000 and 700,000 bpd of Iran’s crude oil supply will disappear from the market in the coming months. This decline will be about 13% to 18% of Iran’s oil production. However, Trump’s move will not eliminate all Iranian oil exports, because there are other countries opposed to its withdrawal from the nuclear deal signed in 2015, especially Britain, France, Germany, Russia and China.<\/p>\n","protected":false},"excerpt":{"rendered":"
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