Oil prices rose on Tuesday amid reports that the United States will restore sanctions on Iran, the world’s fifth largest oil producer. Brent Futures for October delivery rose 0.33% to $ 74 a barrel at 12.02 PM, while WTI Futures for September delivery also rose 0.12% to $ 69.09 a barrel. The United States has restored sanctions against Iran when President Donald Trump reiterated plans to impose greater penalties on the country’s oil sales in November. The crude oil sanctions will take effect on November 4 this year. Trump also signed an executive order to limit the purchase of dollar banknotes by Iran, preventing the government from trading gold and other precious metals and preventing the country from selling or acquiring various industrial metals. These steps will take effect on 7 August. In previous US crude sanctions against Iran, about half of its oil exports of 2.4 million barrels were removed from the market. Analysts expect that Iranian production will drop further amid restored sanctions and push oil prices further.
Meanwhile, China said it would not join the global oil embargo on Iran, although it would not increase its purchases. “Many people think China can only buy all Iranian oil but they come out and say: ‘Yes, we may not reduce but we will not increase our demand too.’ So, you can see a significant crisis in terms of inventory lost to the market and then it clearly means that oil prices can strengthen, “Sen added.