The international oil benchmark, Brent crude, rose above $86 per barrel on Wednesday, as traders considered reported declines in Iranian exports due to pending United States’ sanctions.
The upturn in oil prices follows US Secretary Mike Pompeo’s announcement on Wednesday that the US was terminating the 1955 Treaty of Amity, its economic agreement with Iran.
Brent, against which Nigeria’s oil is priced, hit a new four-year high at $86.74 per barrel on Wednesday, fuelled by concerns about a shortfall in global supply as US sanctions whittle away at Iranian crude exports. It stood at $86.48 as of 7:40pm Nigerian time.
Russian President, Vladimir Putin, has said President Donald Trump needs to look in the mirror to find the person responsible for higher oil prices.
The Trump administration’s decision to pull out of a 2015 international agreement to curb Iran’s nuclear programme, and a re-imposition of economic sanctions on the third-largest producer of crude — set to kick in next month — has helped to drive oil prices higher because the Organisation of the Petroleum Exporting Countries isn’t expected to be able to match the country’s lost output, according to CNBC.
In May, Trump pulled the US out of the 2015 Iran nuclear deal and restored sanctions on OPEC’s third largest oil producer. Much of the world, including the European Union, China and Russia, opposed the move, but companies around the world have curtailed their imports from Iran for fear of running afoul powerful US sanctions.
“President Trump has said he thinks the oil price is too high. Well, probably to some extent he’s right, but we are absolutely OK with it at $65 to $75 per barrel to ensure the efficient operation of oil companies and ensure investment,” Putin said on Wednesday during an address to delegates at the Russia Energy Week forum in Moscow.
He added, “But let’s be frank, such oil prices are to some extent the result of the US administration. I’m talking about sanctions against Iran, about political problems in Venezuela and just looking at what’s happening in Libya.
“If we touched upon the topic we are discussing now with him (Trump), I would say, if you want to find the culprit of who’s guilty that prices are growing, then you should just have a look in the mirror.”
Putin’s comments come after Trump criticised Russia and OPEC for a 2016 deal in which they agreed to curb oil output in a bid to support prices that had slumped in mid-2014 due to a glut in global supply.
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