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Oil, Gas, Petrochemical and Energy Field Specialized Channel
Oil, Gas, Petrochemical and Energy Field Specialized Channel
Oil, Gas, Petrochemical and Energy Field Specialized Channel

Oil Prices 1% ahead of US Sanctions against Iran

Markets could still be underestimating the supply crunch from Iran sanctions.

Oil prices rose by 1 per cent on Thursday as investors focused on the prospect of tighter markets due to US sanctions against major crude exporter Iran, which are set to be implemented in November. Front-month Brent crude futures were at $82.17 per barrel at 0133 GMT, up by 83 cents, or 1 per cent from their last close, just off Tuesday's four-year highs.

US West Texas Intermediate (WTI) crude futures were at $72.41 a barrel, up 84 cents, or 1.2 per cent from their last settlement. Traders said oil markets were tightening ahead of Washington's planned sanctions on Iran's petroleum industry from Nov 4.

“We view that crude market risks are heavily skewed to the upside and whilst we are not explicitly forecasting Brent to rise to $100 per barrel, we see material risks of this coming to fruition,” Japanese bank Mitsubishi UFJ Financial Group said in a note to clients.

At its 2018 peak, Iran exported around 3 million barrels per day (bpd) of crude oil, equivalent to 3 per cent of global consumption. Shipping data shows Iran September exports fell to around 2 million bpd as buyers around the world bow to US pressure and cut imports. The Organization of the Petroleum Exporting Countries (OPEC) has little spare capacity to make up for an expected shortfall in Iranian exports.

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