MSN.com : CNN : Matt Egan
President Donald Trump chose a dicey time to crack down on Iran, the world’s fifth-biggest oil producer.
Global oil supplies were already getting tight before Trump vowed on Tuesday to exit the Iran nuclear deal and impose “powerful” sanctions on the OPEC nation.
Energy industry insiders say Trump’s tough stance on Iran will probably keep oil and gasoline prices higher than they would otherwise be.
Iran ramped up its oil production by 1 million barrels per day after sanctions were lifted in early 2016. At least some of that oil will now be pulled from the market — at a time when oil prices are already rising because of production cuts by OPEC and Russia as well as instability in Venezuela.
Dan Eberhart, CEO of oilfield services company Canary LLC, drew a direct connection: “Withdrawing from the Iran nuclear deal will support higher oil prices.”
Trump telegraphed the move, and oil prices shot up in recent weeks as traders anticipated it. Crude topped $70 a barrel this week for the first time in nearly four years. Hours before Trump’s announcement, federal government forecasters raised their estimate for 2018 oil prices by 10.5% to an average of $65.58 a barrel.
Crude oil prices swung wildly on Tuesday, eventually climbing back above $70 a barrel later in the day. Continue reading…