The price of oil increased as investors focused on the effects of United States sanctions on Iran. Photo: AP
INTERNATIONAL - Oil prices rose on Monday as investors focused on the impact of US sanctions on Iran despite assurances by Washington that Saudi Arabia, Russia and the United States could together raise output fast enough to offset falling supplies.

The US Energy Secretary Rick Perry said in an interview with Reuters on Friday that he did not expect any price spikes and that the world’s top three oil producers could between them raise global output in the next 18 months.

Brent crude oil was up 45 cents a barrel at $78.54 by 0830 GMT. The US light crude was up 45 cents at $69.44.

Iran’s oil exports have been falling in recent months as more buyers, including its second-largest buyer India, cut imports ahead of US sanctions that take effect in November. Washington aims to cut Iran oil exports down to zero to force Tehran to re-negotiate a nuclear deal.

“Iranian crude oil export loadings have declined by 580,000 barrels per day in the past three months,” Bank of America Merrill Lynch analysts said in a note to clients on Monday.

A leading Iranian official said on Saturday that Saudi Arabia and Russia had taken the oil market “hostage” and accused other producers of turning the Organization of the Petroleum Exporting Countries into “a US tool”.

Iran is the third-largest OPEC producer.

A deepening trade war between the United States and China is unsettling commodities and energy markets.

US President Donald Trump is likely to announce new tariffs on about $200 billion on Chinese imports on Monday, a senior administration official told Reuters.

The trade dispute is raising concerns about the potential for slower growth in oil consumption, offsetting supply concerns stemming from the upcoming US sanctions on Iran over its nuclear program.

Also weighing on oil prices, US drillers added two oil rigs in the week to December 1, bringing the total count up to 749, the highest since September, Baker Hughes energy services firm said on Friday. 

A Joint Technical Committee of OPEC and non-OPEC producers was due to meet on Monday to coordinate production may speak afterwards.

“Markets will be looking towards OPEC and Joint Technical Committee conference call for forward guidance on oil market fundamentals in the coming term,” said Benjamin Lu, a broker at Philip Futures.

- REUTERS