Oil prices increase amid possible renew of sanctions against Iran
By Kamila Aliyeva
Oil prices on Thursday morning, April 26, rose amid expectations of the resumption of U.S. sanctions against Iran, declining output in Venezuela and ongoing strong demand.
On London ICE (InterContinental Exchange Futures) cost of the Brent crude oil increased $0.43 to trade at $74.43, while the price of Light crude at the NYMEX (New York Mercantile Exchange) rose $0.29 to stand at $68.34 on world markets. At the same time, the price of a barrel of Azeri Light crude oil decreased $1.25 to stand at $75 in the world markets.
Venezuela’s plunging output and looming U.S. sanctions against Iran come against a backdrop of strong demand, especially in Asia, the world’s biggest oil consuming region, Reuters reported.
The U.S. must decide whether to maintain a nuclear deal and renew sanctions against Tehran before May 12, which is likely to lead to a reduction in the country's oil exports.
On April 25, French President Emmanuel Macron, during an official visit to the U.S., said that he sees signs that U.S. President Donald Trump will pull out of the nuclear deal with Iran reached in 2015. Under the agreement, Iran suspended its nuclear program in return for the lifting of sanctions.
As Iran is the third largest producer in the Organization of Petroleum Exporting Countries (OPEC), sanctions against the country can reduce the global supply of oil.
OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva
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