Investing.com - Oil prices rose on Tuesday morning in Asia, triggered by fears that U.S. sanctions could reduce Iran’s crude output.
Crude Oil WTI Futures for June delivery were trading at $68.94 a barrel in Asia at 11:30PM ET (03:30 GMT), up 0.44%. Brent crude futures for June delivery, traded in London, were up 0.31% at $74.94 per barrel.
Meanwhile, Shanghai Crude Oil WTI Futures for September delivery were up 2.73% at 448.20 yuan ($70.97) per barrel.
Oil markets have been swinging in response to posturing from the U.S. and members of the Organization of the Petroleum Exporting Countries (OPEC). Just yesterday, prices tumbled amid fears that oversupply could return due to a rising U.S. rig count which indicated further increases in the country’s crude output.
Iran’s oil minister Bijan Zanganeh said there would be no need to extend the OPEC-led supply cut deal if oil prices strengthened.
Prices rebounded quickly on conviction that U.S. sanctions could dampen Iran’s output, even if the nation produces above its OPEC quota.
This month, oil has risen to its highest since late 2014. Prices have been supported by U.S. sanctions on Russian companies and individuals and by fears Washington may take new measures against struggling Venezuela and especially OPEC member Iran.
As Iran is OPEC’s third-largest producer, sanctions on the nation could tighten global oil supplies.
The U.S. has until May 12 to decide whether it will leave a nuclear deal with Iran and impose new sanctions against Tehran.
Overall markets remain well supported by healthy demand and ongoing supply cuts.
OPEC, Russia and several other oil producers have been cutting output since January 2017 in an attempt to reduce the global oversupply and prop up prices. Results are closing in on the original target of the pact – reducing industrialized nations’ oil inventories to their five-year average – and there is some confidence that the pact will be extended beyond 2018.