Oil prices climb; US looks to prevent supply shortfall

SINGAPORE: Oil prices rose on Tuesday amid looming US sanctions against Iran’s petroleum industry, despite efforts by Washington to get other major suppliers to make up for the expected disruption.
US West Texas Intermediate (WTI) crude futures were at $67.70 per barrel at 0637 GMT, up 65 cents, or 0.2 per cent from their last settlement. Brent crude futures climbed 38 cents, or 0.5 per cent, to $77.75 a barrel.
“Markets… are expecting substantial price pressure as Iran sanction loom,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
Washington is putting pressure on other countries to also cut Iran imports, with close allies like South Korea and Japan, but also India, showing signs of falling in line.
But keen not to see oil prices spike, US Energy Secretary Rick Perry met with Saudi Energy Minister Khalid al Falih on Monday in Washington, as the Trump administration encourages big oil-producing countries to keep output high ahead of the renewed sanctions. Perry will meet with Russian Energy Minister Alexander Novak on Thursday in Moscow.
Russia, the United States and Saudi Arabia are the world’s three biggest oil producers by far, meeting around a third of the world’s almost 100 million barrels per day (bpd) of daily crude consumption.
Combined output by these three producers has risen by 3.8 million bpd since September 2014, more than the peak 3 million bpd Iran has managed during the last three years.
Russian Energy Minister Alexander Novak said that Russia and Opec members may sign a new long-term cooperation deal at the beginning of December, the TASS news agency reported. — Reuters