- Oil Prices Surge as US-Iran Tensions Deepen
Global oil prices surged on Monday following a comment by the U.S Secretary of State Mike Pompeo that Iran would be significantly sanctioned.
The comment bolstered global oil prices during the Asian trading session.
Brent crude oil, against which Nigerian oil is measured, gained 0.4 percent or 25 cents to $65.45 a barrel on Monday. While the U.S West Texas Intermediate (WTI) rose by 37 cents or 0.6 percent to $57.80 a barrel.
President Trump had called off a retaliatory military strike on Iran last week following Iran perceived attacks on the United States for downing an unmanned U.S military drone.
While the president had said he is not seeking war with an already sanctioned Iran, Mike Pompeo, a notable voice of the administration, has announced that the world’s largest economy would significantly sanction Iran.
The uncertainty surrounding the situation continues to support global oil outlook as a significant sanction on Iran is expected to further cut global oil supplies. This, coupled with Venezuela sanctions, Libya struggle and OPEC cuts will support Brent bullish move in the near-term to about $67 as shown above.
“The Middle East clashes should support oil prices at the start of the week as crude markets will wait to see Iran’s response to the threat of additional sanctions, ” said Edward Moya, senior market analyst at OANDA in New York.