US Sanctions Against Iran Push Oil Prices Up Above $70

For the first time since November 2014, crude oil prices traded above $70 per barrel overnight due to the recent sanctions being imposed by U.S. President Donald against Iran which may possibly threaten the country’s crude oil production contributing to the recent vision of the Organization of Petroleum Exporting Countries to help prevent a global glut supply as well as push oil prices higher to more normal levels.

Major crude oil prices also hit its highest levels last seen since 2014 due to the ongoing Venezuelan economic crisis that may possibly result into its oil industry collapsing in a short period of time.

Crude Movement

Crude oil prices which started to recover from a massive decline last year during the beginning of the year have hovered near $70 per barrel numerous times this year due to a number of combined factors including signs of a weak U.S. crude production as well as hints from the OPEC and member country representatives regarding a possible extension of the deal to extend the ongoing cuts again on top of its most recent decision to extend the agreement by another nine months until the end of 2018.

Crude production in the United States touched its highest level in February ever overtaking Saudi Arabia as the second biggest oil producer in the world. This pushed oil prices down to a one-month low. The recovery in crude oil prices has been continuously weighed in on by the continuous growth of U.S. crude draw with their production even hitting 10 million barrels over the past months. 

By the end of March, U.S. crude oil future contracts have traded near a three-year high due to possible sanctions being imposed by the United States against Iran as. Tensions in the Middle east potentially affecting its massive supply and production also helped oil prices trade higher during the past couple of months. A three-year high last month was also observed due to a sudden decline in weekly crude inventories in the United States. 

Brent crude oil futures are now seen to trade at $75.57 per barrel which is 0.9% or 70 cents higher from its previous close. During the early trading session, Brent crude oil futures also recorded its highest since November 2014 to trade at $75.89 per barrel.

The U.S. West Texas Intermediate(WTI) crude futures rallied 1% to settle at around $70.42 per barrel where the WTI was seen to trade above $70 per barrel for the first time. 

In Asia, crude oil futures in Shanghai also touched a new high trading by as much as $72.54 per barrel from a previous record high of $71.32 per barrel. Crude oil for delivery in June at the multi-commodity exchange was up by 1.26% to RS 4,728 per barrel while oil for May delivery also traded 1.22% higher.

See also: Asia Crude Oil Prices Higher

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