Oil Spikes as Trump Exits Iran Deal

Oil Spikes as Trump Exits Iran Deal

Oil prices rose more than 2% on May 9, after President Donald Trump announced the US withdrawal from the Iran nuclear deal and a reimposition of the “highest level” of sanctions on the Islamic Republic, Reuters reported.

Brent crude climbed to $77.20 a barrel following the announcement, reaching highs not seen since November 2014.

West Texas Intermediate (WTI) rose by almost $2 to reach $70.96, the highest price in more than three years.

Brent prices currently sit at $76.68 while WTI is trading at $70.79 per barrel, as of 1200 GMT.

Trump’s national security adviser, John Bolton, told reporters after the announcement that companies will be given between 90 and 180 days to end their commercial agreements with Iranian entities, according to Reuters.

It is not yet known how the European Union and Asian countries with business interests to Iran will respond to the renewal of US sanctions. However, the spike in prices reflects fears that Iranian oil exports will decline in the latter half of 2018 as a result.

Iran returned to the oil market in 2016 after international sanctions on Tehran were lifted in return for a restrictions on its nuclear enrichment program.

Iran exported more than 2.6 million barrels per day in April 2018, making it one of the largest crude exporters in OPEC.

Saudi Arabia stated on Wednesday that it would work with other producers to lessen the impact of any oil shortages.

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