Oil Higher as U.S. Sanctions on Iran Raise Supply Concerns
Oil prices rose on Monday as investors focused on the impact of U.S. sanctions on Iran despite assurances by Washington that Saudi Arabia, Russia and the United States could together raise output fast enough to offset falling supplies.
U.S. Energy Secretary Rick Perry said in an interview with Reuters on Friday that he did not expect any price spikes and that the world's top three oil producers could between them raise global output in the next 18 months.
Brent crude oil was up 70 cents a barrel at $78.79 by 1345 GMT. U.S. light crude was up 55 cents at $69.54.
"Oil is pushing higher on widespread expectations of Iranian supply shortages," said Stephen Brennock, analyst at London brokerage PVM Oil.
Iran's oil exports have been falling in recent months as more buyers, including its second-largest buyer India, cut imports ahead of U.S. sanctions that take effect in November. Washington aims to cut Iran's oil exports down to zero to force Tehran to re-negotiate a nuclear deal.
"Iranian crude oil export loadings have declined by 580,000 barrels per day in the past three months," Bank of America Merrill Lynch analysts said in a note to clients on Monday.
A leading Iranian official said on Saturday that Saudi Arabia and Russia had taken the oil market "hostage" and accused other producers of turning the Organization of the Petroleum Exporting Countries into "a U.S. tool".
Iran is the third-largest OPEC producer.
A deepening trade war between the United States and China is unsettling commodities and energy markets.
U.S. President Donald Trump is likely to announce new tariffs on about $200 billion on Chinese imports on Monday, a senior administration official told Reuters.
The trade dispute is raising concerns about the potential for slower growth in oil consumption, offsetting supply concerns stemming from the upcoming U.S. sanctions on Iran over its nuclear programme.
Also weighing on oil prices, U.S. drillers added two oil rigs in the week to Dec. 1, bringing the total count up to 749, the highest since September, Baker Hughes energy services firm said on Friday. <RIG-OL-USA-BHI>
Reporting by Christopher Johnson in London and Meng Meng and Aizhu Chen in Beijing