Oil prices hit $80 a barrel on Thursday for the first time since November 2014 on concerns that Iranian exports could fall because of renewed U.S. sanctions, reducing supply in an already tightening market.
Brent crude futures reached an intraday high of $80.18 a barrel before receding to $79.67 at 1326 GMT.
U.S. President Donald Trump’s decision this month to withdraw from an international nuclear deal with Iran and revive sanctions that could limit crude exports from OPEC’s third-largest producer has boosted oil prices.
France’s Total on Wednesday warned that it might abandon a multibillion-dollar gas project in Iran if it could not secure a waiver from U.S. sanctions, casting further doubt on European-led efforts to salvage the nuclear deal.
A rapid decline in Venezuela’s crude production has further roiled markets in recent months.
“The geopolitical noise and escalation fears are here to stay,” said Norbert Rucker, head of macro and commodity research at Swiss bank Julius Baer. “Supply concerns are top of mind after the U.S. left the Iran nuclear deal.”
Sharp drop in inventory
Global inventories of crude oil and refined products dropped sharply in recent months owing to robust demand and OPEC-led production cuts. Oil stocks were expected to drop further as the peak summer driving season nears, offsetting increases in U.S. shale output, Bernstein analysts said.
Several banks have in recent days raised their oil price forecasts, citing tighter supplies and strong demand.
Further supporting prices, Shell said it was halting crude exports from a major Nigerian pipeline.
