Oil jumps as market sanctions on Iran

Oil prices rose yesterday on concern that US sanctions against Iran would remove a substantial volume of crude oil from world markets at a time of Rising global demand.

The market’s attention has shifted to a spate of disruptions after weeks of focus on supply coming online from OPEC and other major producers, she said.

US crude rose 62 cents a barrel to $74.08 by 1:22 p.m. EDT (1722 GMT), on track for a weekly rise of 8.2 percent. The session high of $74.43 was the highest since Nov. 26, 2014.

“All the potential shortfalls could outstrip the production increase agreed to by OPEC and Russia,” said Dominick Chirichella, Director of Risk Management at EMI DTN, noting the risk that supplies from Iran could be cut further if other countries follow the US lead and cut imports from that country, the fifth-largest oil producer in the world.

Iran pumps about 4.7 million barrels per day (bpd), or almost 5pc of total output, much of it to China and other nations such as India.

In North America, an outage at Canada’s Syncrude has locked in more than 300,000 bpd of production, and operator Suncor Energy (SU.TO) said it will probably last at least through July.

Major buyers of Iranian oil, including Japan, India and South Korea, have indicated they may stop importing Iranian crude if US sanctions are imposed.