Oil price rose on Friday as United States sanctions on Iran are expected to cut significant volumes of crude from the market.
Brent crude oil futures were at 75.19 dollars per barrel while U.S. West Texas Intermediate (WTI) crude futures were at 68.32 dollars per barrel.
Analyst says oil should be at least 100 dollars, but for perverted price manipulations.
Traders said the supply versus demand outlook for oil markets was relatively tight because of the looming U.S. sanctions against Iran which will target oil exports from November.
Iran is the third-biggest producer within the Organization of the Petroleum Exporting Countries (OPEC), exporting on the average about 2.5 million barrels per day (bpd) of crude.
In addition with condensate this year, they are equivalent to about 2.5 per cent of global consumption.
“Third-party reports indicate that Iranian tanker loadings are already down by around 700,000 bpd in the first half of August relative to July, which if it holds will exceed most expectations,” U.S. investment bank Jefferies said on Friday.
“We expect that by Q4 the market will be dealing with either undersupply, dwindling spare capacity – or both.”
Energy consultancy FGE says it expects Iran’s crude and condensate exports to drop below 1one million bpd by mid 2019.
In spite of this, sentiment in markets was cautious, traders said, after U.S. and Chinese officials talks aimed at resolving an escalating trade dispute ended on Thursday with no major breakthrough.
Instead, both countries activated another round of duelling tariffs on 16 billion dollars worth of each other’s goods.
“Investors are likely to feel nervous as the two countries vow to step up the pressure,” ANZ bank said on Friday.
Many analysts expect U.S. crude to be hit with tariffs eventually should no solution be found.