Business

Oil gushes to four-year high over Iran fears

Foreign secretary Boris Johnson pleaded with Donald Trump not to pull out of the Iran nuclear deal on Monday as the deadline for re-certifying the agreement closes in.

Fears that Trump will refuse to extend US sanctions relief for Iran have pushed up oil prices, with futures surging to a four-year high in yesterday's trading.

Brent crude futures touched a peak of $75.91 a barrel and US West Texas Intermediate crude futures rose above $70 a barrel for the first time since November 2014.

Read more: Brent crude oil prices rise above $75 per barrel

The deadline to re-certify the deal with Iran falls this Saturday, 12 May.

Appearing on Fox News, Johnson argued that while the agreement with Iran has flaws, western states should focus on fixing the deal rather than abandoning it.

Johnson was not given an audience with Trump but is expected to meet with Vice-President Mike Pence and Trumps new security advisor John Bolton.

He said on American TV: “The President is right to see flaws in the deal and he set a very reasonable challenge to the world.” However he added that Trump should not “throw the baby out with the bathwater”.

“Iran is behaving badly, has a tendency to develop intercontinental ballistic missiles. We have got to stop that. We have got to push back on what Iran is doing in the region. We have got to be tougher,” he said.

The sanctions previously imposed on Iran by the US in 2012 resulted in the country's crude oil exports being cut from 2.5m barrels per day to a little over 1m.

Iran again became one of the biggest players within crude oil export when sanctions were suspended and the Iran nuclear deal implemented in 2016.

Within the next four years Iran has said that it seeks to increase oil production to be able to yield 4.7m barrels per day, a goal that might be unrealistic if the US imposes new sanctions.

Gholamreza Manouchehri, deputy head of the National Iranian Oil Company, said: “they cannot stop Iran. Our oil industrys development will continue even if new sanctions are imposed on Iran.”

Irans deputy oil minister Amirhossein Zamaninia similarly said: “We should be able to maintain Irans oil market, receive our oil money and secure foreign investment in our oil industry.”

At the same time Venezuela continues to suffer a decline in its oil industry due to lack of investment and reported a 13 per cent fall in production last year according to the Organisation of the Petroleum Exporting Countries (Opec).

Johnson made the trip to the US with the hope of changing Trumps mind. The President has previously called the Iran nuclear arrangement the “worst deal ever”.

On Sunday, Johnson wrote in a comment piece published in the New York Times: “I believe that keeping the deals constraints on Irans nuclear programme will also help counter Tehrans aggressive regional behaviour.”

He continued: “I am sure of one thing: every available alternative is worse. The wisest course would be to improve the handcuffs rather than break them.

Read more: Oil prices drop from recent highs despite concerns over Iran sanctions

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *