Crude prices increase on supply concerns

London : Oil prices rose yesterday on worries over supply after tensions worsened between Iran and the United States, while some offshore workers began a 24-hour strike on three oil and gas platforms in the British North Sea. Iranian Supreme Leader Ayatollah Ali Khamenei on Saturday backed a suggestion by President Hassan Rouhani that Iran could block Gulf oil shipments if its exports were stopped.

The Iranian leadership was responding to the threat of US sanctions after President Donald Trump in May pulled out of a multinational agreement to trade with Tehran in return for its commitment not to develop nuclear weapons. Late on Sunday night, Trump tweeted that Iran risked dire consequences “the like of which few throughout history have suffered before” if the Islamic Republic made more threats against the United States.

Benchmark Brent crude oil LCOc1 rose 42 cents a barrel to $73.49 by 10:26 am EDT (1426 GMT), after earlier strenghtening to a high of $74.50. US light crude CLc1 was up 23 cents at $68.49 a barrel. US crude earlier gained more than $1 a barrel to touch a high of $69.31. US crude pared gains on inventory data from information supplier Genscape, traders said. Inventories at the Cushing, Oklahoma delivery hub had risen slightly in the second half of the week from Tuesday to Friday, though they were still on track to fall for the entire week, traders said.

Despite the trajectory upward of inventories at Cushing, US crude still found support from export demands amid geopolitical tensions, including falling output from Venezuela, said Phil Flynn, an analyst at Price Futures Group in Chicago.