Oil prices surged by more than 2% as US prepares to end import sanctions exemptions applied by Iran By Reuters

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices rose by more than 2 percent Monday to levels not seen since November 2018, according to a source close to Reuters confirming a report that Washington should announce that all Iranian oil imports must stop to be subject to sanctions.

Futures were $ 73.77 per barrel in November 2018 around 0220 GMT Monday, up 2.5% from their last close.

West Texas Intermediate (WTI) crude futures reached a high of $ 65.39 per barrel in November 2018, up 2.2% from their last closing price.

The news that the United States is preparing to announce Monday that all Iranian oil buyers will have to stop their imports or be subject to US sanctions, was reported Sunday by the columnist in charge of politics Foreign and National Security Washington Post, Josh Rogin.

A person familiar with the situation told Reuters that the report was accurate, although a spokesman for the state department declined to comment.

The United States reimposed sanctions in November on Iranian oil exports after President Donald Trump unilaterally withdrew from the 2015 nuclear deal between Iran and six world powers.

Washington has, however, granted eight major oil buyers in Iran, mainly in Asia, exemptions from the sanctions that allowed them to make limited purchases for six months.

The end of the exemptions would mainly affect Asian buyers.

Iran's largest oil customers are China and India, both of which have been pushing for extensions to sanction exemptions.

South Korea is a major buyer of Iranian condensate, an ultra-light form on which its refining and petrochemical industry is based.

The report is part of an oil market already relatively tense.

US Secretary of State Mike Pompeo will announce that "as of May 2, the State Department will no longer grant sanctions to any country that currently imports crude or condensate. Iranian, "said post columnist Josh Rogin, citing two department officials he did not name.

"The chief Iranian hawks in the US actually have the ear of the President as (Secretary of State) Pompeo and (National Security Adviser) Bolton singularly focus on the kneeling of the United States. the Iranian economy, "said Stephen Innes, head of transactions at SPI Asset Management.

"As one could expect, oil prices are rising," he said.

These potential disruptions to Iranian supplies add to an already tense market.

The Organization of the Petroleum Exporting Countries (OPEC) has since the beginning of the year reduced supply to tighten world oil markets and support crude oil prices.

In the United States, energy companies have reduced the number of exploited oil platforms by two to 825, General Electric Energy services firm Baker Hughes (NYSE 🙂 Co said in its weekly report Thursday.

As a result, Brent prices rose by more than a third this year, while WTI grew by more than 40% over the same period.