Traders assessing the impact of the US withdrawing from the Iran deal, combined with issues in Venezuela and a strong USA inventory report has led prices to rise, said Craig Bethune, a senior portfolio manager at Manulife Asset Management.
The U.S. withdrawal is not expected to trigger any snap-back of EU, UN or other non-U.S. sanctions in Iran. As much as $33 billion in payments were made. Given recent developments in North Korea, it could also convince Iran's leaders that the only way to be heard and respected by the U.S.is to become nuclear-capable, sparking a resumption of its atomic weapons program.
Compounding the price is the falling value of the Australian and New Zealand dollar compared to the US standard. "The Treasury Department thanks the UAE for its close collaboration on this matter".
The rise came in the aftermath of US President Trump's decision to abandon a nuclear deal with Iran and his announcing the "highest level" of sanctions against Iran, a member of the Organisation of the Petroleum Exporting Countries (OPEC). Even the loss of the big airplane orders should be manageable: Boeing got 912 net orders in 2017, compared with the 110 promised to Iran.
"What the full impact on Iranian flows will be is still hard to estimate", Petromatrix strategist Olivier Jakob said. With that, what will Iran do now that sanctions are being imposed again, and what will OPEC do, if anything, given anticipated changes in Iranian oil exports? He demanded to "fix" it, threatening to withdraw the United States from the deal.
Speculators are driving the momentum which is pushing WTI and Brent crude oil prices higher. But analysts estimate Iranian oil production could drop by between 300,000 and 1 million barrels per day from about 3.8 million bpd.
Outside OPEC, soaring USA crude oil production could help to fill Iran's supply gap. He added that condensate, a super-light form of crude oil that was excluded in the last round of sanctions, may well be included.
"It's the same witches brew of bullish stuff: Iran, Venezuela, the lack of alacrity by Saudi Arabia to bring more oil onto the market", said John Kilduff, partner at Again Capital in NY.
Goldman Sachs said the planned unilateral US sanctions against Iran would likely have a "high level of efficiency". There will be a 90-day and 180-day wind down period before sanctions really start to bite, which puts the deadline at early November.
"We hope that with this visit to China and other countries we will be able to construct a clear future design for the comprehensive agreement", Mohammad Javad Zarif told reporters after talks in Beijing with his Chinese counterpart Wang Yi.
Oil-rich Saudi Arabia has long said it would match any Iranian weapons development, but Jubeir's renewed vow came after US President Donald Trump pulled the United States out of an accord created to prevent Tehran's alleged quest for the bomb.