Oil reaches its highest level in four years while sanctions against Iran are imminent

SINGAPORE (Reuters) – Oil markets remained firm on Tuesday. Brent crude hit a four-year high just the day before, as markets adjusted to the prospect of tightening supply as US sanctions against Iran came into effect next month.

The international benchmark on Brent crude oil futures, LCOc1, was $ 85.03 per barrel at 04:39 GMT, up 5 cents from their last close, and near the top of 85 , $ 45 reached in the previous session, its highest level since November 2014.

Brent rose about 20% from the last low recorded in August.

The West Texas Intermediate (WTI) CLC1 futures price rose 24 cents, or 0.3%, to $ 75.54 per barrel.

WTI is up about 17% since mid-August.

A trilateral pact between the United States, Mexico and Canada has saved NAFTA, a last-minute deal aimed at saving a free trade zone of $ 1.2 trillion a year, on the point to collapse.

"Crude prices continued their meteoric rise as Canada and the United States updated the NAFTA treaty, which augurs well for economic growth," said Sukrit Vijayakar, director of the board. in Trifecta energy.

More fundamentally, the oil markets have been pushed up by the impending sanctions imposed by the United States against the Iranian oil industry, which, at its last summit reached this year, provided nearly 3% of global oil consumption. nearly 100 million barrels.

Trade data published by Refinitiv Eikon showed that Iran's maritime exports in September were only 1.9 million barrels a day, the lowest level since mid-2016.

"Oil prices continue to climb, supported by the embargo on Iran and related supply problems," said Norbert Ruecker, head of commodity research at the bank Swiss Julius Baer.

"The supply situation seems indeed fragile, because any additional deficit such as a deterioration of the situation in Venezuela would tighten oil reserves."

In HSBC's global economic forecast, HSBC said in the fourth quarter that "its analysts believe that there is now a growing risk that (raw) crude can reach $ 100 a barrel."

(GRAPH: exports of Iran's crude oil by sea – tmsnrt.rs/2Osb61V)

Washington's sanctions are expected to begin on Nov. 4, and analysts believe that excess production capacity may not be sufficient in the short term to meet demand, which could require significant storage capacity losses.

"The camp for believers who have reached the $ 100 mark continues to expand, with concerns over excess production capacity continuing to increase," said Brian Kessens, general manager of the service company. Investment Tortoise.

The Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, has fought to replace declining Iranian exports, according to a Reuters poll released Monday.

With soaring crude prices and many currencies falling in emerging markets, including the Indian rupee and the Indonesian rupiah, analysts warn that economic growth could erode.

"US fiscal tightening, rising oil prices and ongoing trade tensions are weighing heavily on growth prospects," HSBC said.