Increase in Oil Prices Following U.S. Intent to Impose More Sanctions on Iran

One day after the announcement that the U.S. government intends to impose sanctions on more sectors of the Iranian economy, global oil prices reached their highest level in 2019, exceeding $69 per barrel. Brent crude oil rose by 26 cents to $69.29, marking the highest figure in 2019. Reuters reports that the prospect of further sanctions against Iran, along with news of the shutdown of one of Venezuela's main oil terminals, has contributed to this price increase. The Jose oil terminal in Venezuela has ceased operations due to a power outage. An unnamed senior official in the Trump administration stated on Monday that the U.S. is considering sanctions on new sectors of the Iranian economy that have not yet been sanctioned. Iran's oil exports have halved following recent sanctions, and this reduction has led to the lowest level of OPEC exports in four years in March. Currently, Iran exports about 1.1 million barrels of crude oil daily, which is half of what it was at the beginning of last year. Recently, Platts reported that the U.S. intends to further reduce Iranian oil exports. Economic data also indicate economic progress in the United States and China, which has led to an outlook for increased oil demand and consequently rising oil prices. Reports suggest that Saudi Arabia has also reduced its oil production more than agreed, contributing to the increase in oil prices. Meanwhile, President Donald Trump recently tweeted calling for an increase in production from OPEC member countries. In this brief message, Trump described the global oil market as fragile and stated that oil prices have 'gone too high.' An unnamed senior Trump administration official told Reuters that increased domestic oil production in the U.S. could help offset the oil shortage due to reduced Iranian production.