Oil price rose on Tuesday amid reports that the U.S. restored sanctions against Iran, the world’s fifth-largest oil producer.
Brent Oil Futures for October delivery rose 0.33% to $74 per barrel at 1:02AM ET (05:02 GMT), while Crude Oil WTI Futures for September delivery also went up by 0.12% to $69.09 a barrel.
The U.S. has restored sanctions against Iran as as President Donald Trump reaffirmed plans to impose more penalties on the country’s oil sales in November.
The crude sanctions will take effect on November 4 this year. Trump also signed an executive order to restrict purchases of dollar banknotes by Iran, preventing the government from trading Gold and other precious metals and blocking the nation from selling or acquiring various industrial metals. The measures would take effect on Aug. 7
In the previous U.S. crude sanctions against Iran, about half of its oil exports of 2.4 million barrels were removed from the market. Analysts estimated that Iranian production would drop further amid the restored sanctions and drive the oil price further up.
“As we go more towards (the fourth quarter) … that's when we really see the risk of prices going well into the 80s and potentially even into the 90s but very critical is how much Iranian production we lose,” Amrita Sen, chief oil analyst at Energy Aspects, told CNBC in an interview.
Meanwhile, China said it would not join any global embargo of oil from Iran, although it would not increase their purchase of it.
“A lot of people think China can just buy all of the Iranian oil but they came out and said: 'Yes, we may not reduce but we are not going to increase our intake either.' So, you could see a significant crunch in terms of lost supplies into the market and then that obviously means higher prices,” Sen added.