Oil is rising as US sanctions against Iran raise concerns

BEIJING (Reuters) – Oil prices rose on Monday as investors focus on the impact of US sanctions on Iran despite assurances from Saudi Arabia, Russia and the United States.

US Secretary of Energy Rick Perry said in an interview with Reuters on Friday that he did not expect any price hikes and that the world's three largest oil producers could boost global production in the 18 next few months.

Brent crude oil was up 45 cents a barrel to 78.54 dollars at 8:30 GMT. US light crude was up 45 cents to 69.44 dollars.

Iranian oil exports have declined in recent months, and more and more buyers, including India's second largest buyer, have reduced their imports before US sanctions came into effect in November. Washington aims to reduce Iran's oil exports to zero to force Tehran to renegotiate a nuclear deal.

"Iran's crude oil exports have fallen by 580,000 barrels a day in the past three months," Bank of America analyst Merrill Lynch said on Monday.

A senior Iranian official said Saturday that Saudi Arabia and Russia have taken the oil market hostage and accused other producers of turning the Organization of Petroleum Exporting Countries into an "American tool".

Iran is the third largest producer of OPEC.

A growing trade war between the United States and China is destabilizing commodity and energy markets.

US President Donald Trump is expected to announce new tariffs on Chinese imports of about $ 200 billion on Monday, a senior administration official told Reuters.

The trade dispute is raising concerns about the potential for slowing growth in oil consumption, offsetting supply concerns stemming from the upcoming US sanctions against Iran for its nuclear program.

US drillers also added two oil rigs in the week to December 1, bringing the total to 749, the highest level since September, energy services firm Baker Hughes said Friday.

A joint technical committee composed of OPEC and non-OPEC producers was scheduled to meet on Monday to coordinate production.

"The markets will turn to the OPEC conference call and the joint technical committee for forecasting oil market fundamentals in the next quarter," said Benjamin Lu, broker at Philip Futures.