Oil prices grew with US sanctions on Iran imminent, which would tighten global supply in the market.
Spot Brent crude oil futures grew by 42 cents to touch $74.17 per barrel while US West Texas Intermediate (WTI) crude futures increased 30 cents to reach at $69.31 per barrel, reported Reuters.
In July, Iran shipped around 3 million barrels per day (bpd) of crude. With the US sanctions on Iran to come back into force, the global supply is likely to be affected.
In a note to clients, the Australian and New Zealand Banking Group (ANZ) said: “The re-imposition of US sanctions on Iran remains the key (price) driver in the near-term. Supply losses could range from 600,000 to 1.5 million bpd.”
Due to this, ANZ said: “The oil market should remain tight, despite OPEC increasing oil production to offset losses elsewhere.”
Several countries in Europe, China and India do not support the sanctions. However, the US Government wants countries to stop purchasing oil from Iran.
A senior US administration official was quoted by Reuters as saying: “It is our policy to get as many countries to zero as quickly as possible. We are going to work with individual countries on a case-by-case basis, but our goal is to reduce the amount of revenue and hard currency going into Iran.”
According to French bank Societe Generale, there was presently a “comfortable supply” in crude markets, but “Iran sanctions will take another 1 million bpd off the markets”.