Brent oil rises back above $80 as Iran sanctions loom
October 22, 2018
Brent crude oil prices rose back above $80 a barrel on Monday as markets were expected to tighten once U.S. sanctions against Iran’s crude exports are implemented next month.
Benchmark Brent crude oil futures LCOc1 were at $80.26 a barrel at 06:46 GMT, up 48 cents, or 0.6 percent, above their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $69.60 a barrel, up 48 cents, or 0.7 percent.
The U.S. sanctions on the oil sector in Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), are set to start on Nov. 4. The United States under President Donald Trump is trying to reduce Iranian oil exports to zero to force the country to renegotiate an agreement on its nuclear program.
OPEC agreed in June to boost supply to make up for the expected disruption to Iranian exports.
However, an internal document reviewed by Reuters suggested OPEC is struggling to add barrels as an increase in Saudi supply was offset by declines elsewhere.
Fatih Birol, executive director of the International Energy Agency (IEA), said on Monday that other producers may struggle to fully make up for the expected Iran disruption, and that oil prices could rise further.
The U.S. rig count is an early indicator of future output. With activity increasing after months of stagnation, U.S. crude production is also expected to continue to rise.
Reflecting rising U.S. crude exports, the Intercontinental Exchange (ICE.N) said its new Permian West Texas Intermediate crude futures contract deliverable in Houston, Texas, will begin trading on Monday.