Oil prices near multi-year highs as Iran sanctions tighten supply outlook
Oil prices steadied near 3-1/2 year highs on Friday as the prospect of new US sanctions on Iran tightened the outlook for Middle East supply at a time when global crude production is only just keeping pace with rising demand.
US plans to reintroduce sanctions against Iran, which pumps about 4% of the world’s oil, after abandoning a deal reached in late 2015 that limited Tehran’s nuclear ambitions in exchange for the removal of US and European sanctions.
The global oil market is finely balanced, with top exporter Saudi Arabia and No.1 producer Russia having led efforts to curb oil supply to prop up prices.
Benchmark Brent crude oil was unchanged at $77.47 a barrel by 2pm. On Thursday Brent hit $78, its highest since November 2014. US light crude was up 10 cents at $71.46, having touched a 3-1/2 year high of $71.89 on Thursday.
Many analysts expect oil prices to rise as Iran’s exports fall.