Oil prices rose on Tuesday with the reimposition of US sanctions against major crude exporter Iran expected to tighten global supply. Spot Brent crude oil futures were $74.17 per barrel, up 42 cents, or 0.6%, from their last close, CNBC reported.
US West Texas Intermediate crude futures were up 30 cents, or 0.4%, at $69.31 barrel.
US sanctions against Iran, which shipped out almost 3 million barrels per day of crude in July, officially came into effect on Tuesday.
“The reimposition 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,” ANZ said on Tuesday in a note to clients. As a result, the bank said, “the oil market should remain tight, despite OPEC increasing oil production to offset losses elsewhere”.
Many countries, including US allies in Europe as well as China and India, oppose the sanctions but the US government said it wants as many countries as possible to stop buying Iranian oil. “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,” a senior US administration official said on Monday.
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