Oil prices have increased today due to concerns over removal of substantial volume of crude oil from the global market due to US sanctions on Iran.

Benchmark Brent crude LCOc1 increased by $1.49 to touch $79.34 a barrel while US light crude CLc1 fell by 15 cents to reach $73.30, reported Reuters.

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Iran is the world’s fifth largest oil producing country. It produces about 4.7 million barrels per day (bpd), almost 5% of the world’s oil production. A significant part of this is exported to China, India and other countries.

The US sanctions on Iran is intended to stop the latter from exporting oil, which is a major revenue generator. It expects oil OPEC and Russia to increase their production to meet the demand.

However, analysts and investors consider that US sanctions against Tehran will significantly increase the prices.

“The stronger the implementation and enforcement, the higher the oil price will go. In such a case, triple-digit oil prices are not off the table.”

In a note to clients, Vienna-based consultancy JBC Energy was quoted by the news agency as saying: “The stronger the implementation and enforcement, the higher the oil price will go. In such a case, triple-digit oil prices are not off the table.”

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Furthermore, stocks in North America have dropped due to an outage at Canada’s Syncrude, which has affected more than 300,000bpd of production.

According to operator Suncor Energy, this outage is expected to continue until July.

Voluntary supply cuts by OPEC, along with supply disruptions from Libya and Venezuela have tightened the oil market.

Although OPEC and Russia have stated they will increase production, analysts believe additional supply may not be sufficient enough to meet this demand.