Oil prices hit three-year high on Iran, Venezuela concerns

Crude oil prices rose to highest in more than three years on Monday as concerns over US decision regarding Iran deal brought in supply fears.

Brent crude was last trading up 1 percent at $75.65 per barrel (bbl), while US West Texas Intermediate (WTI) crude futures rose 1.1 percent to $70.46/bbl.

Global oil markets are already feeling the impact of supply crunch from Venezuela, where a deepening economic crisis has led to the country’s output almost halving since the early 2000s to 1.5 million barrels per day in March.

Meanwhile, US President Donald Trump is expected to take a decision on whether to extend sanctions waivers against Iran when they expire on May 12 or to walk away from the 2015 agreement.

A decision by the US to not extend sanction waivers against Iran would likely lead to a drop in the country’s oil exports.

“The oil market puts the probability that President Trump will pull the US out of the Iran nuclear agreement on May 12 and reinstate sanctions on the Islamic Republic at more than 50 percent,” National Bank of Kuwait said in a report on Sunday.

Germany-based Commerzebank said in the light of the uncertainties it is raising its year-end forecast for the price of Brent to $65/bbl.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com