Libya force majeure on oil exports make prices skyrocket

President Rouhani talks to Iranian expatriates in Bern Switzerland

The Trump administration's initial announcement that the United States expects all Iranian oil imports to stop within just four months roiled markets across the world and set even American allies on edge.

"The OPEC Monopoly must remember that gas prices are up & they are doing little to help".

Brent crude futures were at $77.82 per barrel, up 6 cents from their last close.

Brent crude futures lost 85 USA cents to settle at US$77.39 a barrel.

Bijan Zanganeh condemned the U.S. president for trying to politicize the decisions of the Organization of the Petroleum Exporting Countries (OPEC).

"With contentious midterm USA elections looming, the President continues to strong-arm Saudi Arabia to increase oil supplies which, at least for now, is containing price action below WTI $75 per barrel", said Stephen Innes, Head of Trading for Asia/Pacific at futures brokerage OANDA.

OPEC together with a group of non-OPEC producers led by Russian Federation started to withhold output in 2017 to prop up prices.

The Obama administration had made a similar exception for countries such as India and China, the two largest buyers of Iranian crude, but the new regime under President Donald Trump is expected to be more heavy-handed with the implementation of sanctions when they kick in, largely because of its desire to increase pressure on Tehran for a regime change. "Looming U.S. sanctions on Iran, however, are causing serious concerns amongst market players".

Saudi Arabia's objective, revealed at the OPEC meeting in June, has been to stabilise production and prices around current levels.

And Trump's lack of understanding of the dynamics of OPEC and the global oil markets come through particularly clearly with every tweet he sends and FOX interview he gives. Last month, members of OPEC agreed to pump an additional 1 million barrels of crude daily, a move that should help contain prices.

USA tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday and Beijing has vowed to respond immediately in kind, setting the two world's biggest economies on a path towards a full-blown trade conflict.

The potential trade war between the United States and China comes amid a tight oil market.

Prices have risen as a result of Washington's plans to reimpose sanctions against Iran, Opec's No. 3 producer, analysts said.

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