Oil prices rose to new heights on Thursday as traders adjusted to the prospects of renewed US sanctions against major crude exporter Iran amid an already tightening market.
The United States plans to impose new sanctions against Iran, which produces around 4 percent of global oil supplies, after abandoning an agreement reached in late 2015 which limited Tehran’s nuclear ambitions in exchange for removing U.S.-Europe sanctions.
Oil prices rose sharply in response to the announced measures. Brent crude futures, the international benchmark for oil prices, hit their strongest since November 2014 at $77.76 per barrel on Thursday. US West Texas Intermediate crude futures also marked a November-2014 high, at $71.75 a barrel.
In China, which is Iran’s single biggest buyer of oil, Shanghai crude futures posted their biggest intra-day rally since their launch in March, rising more than 4 percent to a dollar-denominated record of around $73.40 per barrel.
Goldman Sachs said the planned unilateral US sanctions against Iran would likely have a high level of efficiency.
As a result of sanctions and because of risks to supplies elsewhere, especially in Venezuela, the US bank said this may force prices to go up to $82.50 per barrel.
Analysts had little hope that opposition to the US action would prevent sanctions from going ahead.