Oil prices spike further after US move on Iran buyers

An investor finishes his meal at a stock brokerage in Beijing on Tuesday, April 23, 2019. Asian stocks were mixed on Tuesday while oil prices soared to their highest level since October after the U.S. said it would soon impose sanctions on all buyers of Iranian oil. (AP Photo/Ng Han Guan)

Oil prices spiked Tuesday to their highest levels since October on supply fears, after the Trump administration said it would soon impose sanctions on all buyers of Iranian oil.

LONDON — Oil prices remained near six-month highs Tuesday in the wake of the Trump administration's announcement that it would soon impose sanctions on all buyers of Iranian oil.

On Monday, the Trump administration said it would no longer exempt any countries from U.S. sanctions if they continue to buy Iranian oil. The administration had granted eight waivers when it re-imposed sanctions on Iran in November. These expire May 2.

The move will choke off more than $50 billion of annual Iranian income, which the U.S. says funds destabilizing activity in the Middle East and beyond. China, India, Japan and South Korea and Turkey are major importers of Iranian oil.

Industry experts said the sanctions could potentially remove up to 1.2 million barrels of oil per day from international markets. But that number will likely be lower, depending on how countries respond and just how much oil Iran continues to export

The decision has already been criticized by the European Union. European Commission spokeswoman Maja Kocijancic expressed "regret" Tuesday over the U.S. decision, saying that it "risks further undermining" the Iran nuclear deal.

In the markets, the move gave oil prices a further lift.

A barrel of benchmark New York oil was up 0.7% at $65.99, slightly below its earlier high since October of $66.10. Meanwhile, Brent, the international standard, was 0.3% higher at $74.25 a barrel, slightly down on its earlier highest level since November of $74.65.

"There isn't much doubt about the trigger for the latest rally, with Trump's decision not to extend waivers on imports of Iranian oil beyond May unsurprisingly providing further upward pressure," said Craig Erlam, senior market analyst at OANDA.

The oil price advance has helped shore up oil stocks. London-listed BP was up 2.4% while France's Total rose 1.9%.

However, markets in Europe reopened after the Easter holiday on a flat note. France's CAC 40 was down 0.2% to 5,570 while Germany's DAX was 0.2% lower at 12,196. Britain's FTSE 100 was up 0.4% at 7,491.

Wall Street was set for a steady open with Dow futures up 0.1% but the broader S&P 500 futures down 0.1%.

Traders are waiting for a slew of U.S. earnings reports from big companies such as Twitter, Facebook and Microsoft starting Tuesday.

There was no strong impetus for buying in Asia. Reports from a recent high-level meeting in China, which was chaired by President Xi Jinping, showed willingness to fine-tune monetary policy but raised questions about future government stimulus.

Japan's Nikkei 225 index was 0.2% higher at 22,259.74 and the Kospi in South Korea added 0.2% to 2,220.51. Hong Kong's Hang Seng was flat at 29,963.24. Australia's S&P ASX 200 gained 1% to 6,319.40 while the Shanghai Composite gave up 0.5% to 3,198.59.

Elsewhere, the euro was flat at $1.1250 while the dollar was steady at 112 yen.

Related News

Apple boss Tim Cook optimistic about UK's future...

Feb 9, 2017

Apple CEO Tim Cook says the company the technology giant is committed to Britain's future outside...

Apple's Tim Cook: Fake news is 'killing people's...

Feb 11, 2017

Apple chief executive Tim Cook says fake news is "killing minds," and governments and tech firms...

Yahoo issues another warning in fallout from...

Feb 15, 2017

Yahoo is warning users of potentially malicious activity on their accounts between 2015 and 2016

Epic 'Planet Earth II' offers creatures'-eye view...

Feb 16, 2017

From jungles to deserts to mountains, the BBC's epic nature series "Planet Earth II" takes viewers...

Uber to investigate sexual harassment claim by...

Feb 20, 2017

Uber's CEO has ordered an investigation into a sexual harassment claim made by a female engineer...

The dirty dozen: UN issues list of 12 most...

Feb 27, 2017

The World Health Organization has issued a list of the top dozen bacteria most dangerous to humans,...

Sign up now!

About Us

NextNewTech is a fresh online media collaboration, aimed at bringing you not only the latest tech and gadget news, but how it’s going to change our lives in the near future.

Popular News