Oil prices jumped on Monday as the United States looked set to announce that all buyers of Iranian oil must end their imports or be subject to sanctions.
Brent crude futures rose as much as 3.3 percent to $74.31 a barrel, the highest since Nov. 1, before easing back to $73.62 by 0647 GMT, which was still up 2.3 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures climbed by as much as 2.9 percent to $65.87 per barrel, the most since Oct. 31. They were at $65.41 at 0647 GMT, up 2.2 percent from their previous settlement.
News that the United States is preparing to announce on Monday that current buyers of Iranian oil would no longer be given waivers to sanctions was first reported on Sunday by the Washington Post.
Secretary of State Mike Pompeo will announce “that, as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate”, a columnist for the newspaper said, citing two State Department officials that he did not name.
A person familiar with the situation confirmed to Reuters that the report was accurate, although a State Department spokesman declined to comment.
“Should Iran’s sanction waivers indeed be lifted, that could boost oil prices towards the $80 per barrel mark,” said Han Tan, analyst at futures brokerage FXTM.
Prior to the re-imposition of sanctions, Iran was the fourth-largest producer among the Organization of the Petroleum Exporting Countries (OPEC) at almost 3 million barrels per day (bpd), but April exports have shrunk well below 1 million bpd, according to ship tracking and analyst data in Refinitiv.
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