Goldman: US-Iran Standoff Is A Long-Term Threat To Oil Supply

Goldman: US-Iran Standoff Is A Long-Term Threat To Oil Supply

Jeff Brown, president of consultancy Facts Global Energy (FGE), said at the Reuters Global Commodities Summit last week that one potential upside for oil prices would be the USA imposing fresh sanctions on Iran.

The price of barrel of Brent oil, which started yesterday from 57.16 dollars and saw highest 58.45 dollars, opened from 57.78 dollars this morning.

During the previous round of sanctions against Tehran, around 1M bpd of oil supplies were cut off from global markets.

"That is why I am directing my administration to work closely with Congress and our allies to address the deal's many serious flaws so that the Iranian regime can never threaten the world with nuclear weapons", President Trump said.

The crude oil prices were also supported by worries over renewed USA sanctions against Iran as on Friday, President Donald Trump refused to certify to Congress that Tehran is complying with the 2015 Iran nuclear agreement.

Under U.S. law, the president must certify every 90 days to Congress that Iran is complying with the deal.

Still, Mihir Kapadia, chief executive officer and founder of Sun Global Investments, said that "while there is an ongoing political feud, it's out of the best interest of both sides to not disrupt oil production". At the same time, the US administration will try to convince European leaders to impose new sanctions on Tehran and return to the negotiating table. Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries, pumps most of its 4.47 million barrels a day from fields in the south and ships it from the Persian Gulf port of Basra.

An oil rig situated at Louisiana's Lake Pontchartrain was also reported to have exploded injuring six people.

USA crude prices were also supported by drillers cutting back the number of rigs looking for new production.

U.S. West Texas Intermediate (WTI) crude futures were at $51.89 per barrel, up 44 cents, or 0.9 percent.

Energy services firm Baker Hughes said that in the week to 13 October, drillers cut five oil rigs to bring the total down to 743, the lowest since early June.

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