U.S. oil prices rose to a three-and-a-half year high on Thursday, bolstered by supply concerns due to U.S. sanctions that could cause a large drop in crude exports from Iran.
U.S. West Texas Intermediate (WTI) crude futures rose 83 cents to $73.59 a barrel, up 1.1 percent. It reached $74.03 earlier in the session, highest since Nov. 26, 2014.
The United States this week demanded all countries halt imports of Iranian oil from November, a hardline position the Trump administration hopes will cut off funding to Tehran.
On Thursday, officials said they would work with countries on a case-by-case basis. China, the biggest importer of Iran’s oil, has not committed to the U.S. position.
“The sanctions are trying to isolate Iran a bit more, and that potentially cuts more oil off from the overall global arena as a whole,” said Mark Watkins, a regional investment strategist at U.S. Bank Wealth Management.
“If you’re having Iran’s oil taken off the market, then you have a decrease in supply and by all means, that’s going to put more pressure on the price of oil to move up.”
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