World oil prices reach maximum since 2014
By Sara Israfilbayova
World oil prices on May 10 are trading at their highest levels since November 2014 on the decision of U.S. President Donald Trump to withdraw from the nuclear deal with Iran.
Brent crude oil futures were at $77.78 per barrel, up 0.73 percent, U.S. West Texas Intermediate (WTI) crude futures were up 0.77 percent, at $71.69 a barrel, according to RIA Novosti.
Oil prices have renewed their highs for 3.5 years after Trump announced that the U.S. is withdrawing from an agreement with Iran on the nuclear program reached by the six international mediators (Russia, the United States, Britain, China, France, Germany) in 2015. In addition, the U.S. president announced the restoration of all sanctions, the effect of which was suspended as a result of the deal.
The imposition of sanctions against Iran could lead to a
reduction in world oil reserves. At present, Iran accounts for
about 4 percent of the global supply in the oil market, according
to Reuters. Analysts at Goldman Sachs note that U.S. sanctions
against Iran are likely to have a “high level of efficiency.”
According to their forecasts, in the summer the price of Brent
crude oil could reach $82.5 per barrel.
Support for the growth of world prices also provided data on the
reserves of raw materials in the U.S. The Energy Ministry of the
country reported that commercial oil reserves in the U.S.
(excluding the strategic reserve) for the week ended on May 4
decreased by 2.2 million barrels, or 0.5 percent - to 433.8 million
barrels, while the reduction was projected only 0.2 million
barrels.
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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Sara Israfilbayova is AzerNews’ staff journalist, follow her on Twitter: @Sara_999Is
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