Iran has been selling more oil at higher prices in recent weeks. The country sold light crude oil at $47.58 per barrel in the week ended on June 10, a $1.93 higher from the previous week, according to the Teheran Times. Iran’s price hike comes as the country expands output to reach its pre-sanction market share; and as Saudi Arabia has been raising its own crude oil prices. It was only a few months ago that Saudi Arabia and Iran were rushing to sign contracts with Asian customers, undercutting each other, pushing prices lower, towards the $20s.
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Futures in New York dropped as much as 1.1 percent after rising 0.5 percent earlier. Israeli Prime Minister Benjamin Netanyahu said his country has documents that prove Iran had a program to build atomic bombs. That’s raising concern Trump may pull the U.S. out of a nuclear accord between Iran and world powers, a move that energy consultant FGE says could cut the Persian Gulf nation’s 2019 oil exports by 700,000 barrels a day. FGE Chairman Fereidun Fesharaki said Trump is likely to restore sanctions on Iran, meaning buyers would have to cut their crude purchases from the country in 180 days. The nation’s exports could drop by 200,000 to 500,000 barrels a day this year, leading to higher oil prices, he said. Click Read More below for additional information.
Oil prices rose on Friday and were on track for a weekly increase as geopolitical tensions over Iran remained unresolved, although flagging prospects for global economic growth amid the U.S.-China trade war capped gains. Prices also drew support from a crude inventory draw in the United States, but gains were limited as the fall appeared to have been largely anticipated. U.S. production in the Gulf of Mexico was still feeling the effects of Hurricane Barry.