Oil prices rose more than two percent on Wednesday with Brent hitting a 3-1/2-year high, after U.S. President Donald Trump abandoned the Iran nuclear deal and announced the “highest level” of sanctions against the OPEC member.
Ignoring pleas by allies, Trump on Tuesday pulled the U. S. out of an international nuclear deal with Iran that was agreed in late 2015, raising the risk of conflict in the Middle East and casting uncertainty over global oil supplies amid an already tight market.
Brent crude oil futures at one point touched their highest since November 2014 at 76.75 dollars per barrel.
They were still at 76.52 dollars per barrel at 0628 GMT, up 1.67 dollar or 2.2 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 1.43 dollars per barrel, or 2.1 percent, at 70.49 dollars a barrel, near highs also last seen in late 2014.
In China, the biggest single buyer of Iranian oil, Shanghai crude futures hit their strongest in dollar terms since they were launched in late May, above 73.20 dollars per barrel.
Analysts said the soaring prices were the result of an expected fall in Iranian oil exports.
Iran re-emerged as a major oil exporter in 2016 after international sanctions against it were lifted in return for curbs on its nuclear program, with its April exports standing above 2.6 million barrels per day (bpd).
That made Iran the third biggest exporter of crude within the Organization of the Petroleum Exporting Countries (OPEC), behind Saudi Arabia and Iraq.
