Crude Oil Surges Past $70 Over Iran Oil Sanction Fears

Crude oil extends gains, surges past $70 for the first time in more than a month, after US officials says oil buyers must cut all Iranian crude imports by Nov.

Oil prices rose on Wednesday on reports that U.S. officials urged all countries to stop Iranian crude imports from November.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $70.83 a barrel, up 30 cents, or 0.43 percent.

Brent crude futures LCOc1 were at $76.60 per barrel, up 29 cents, or 0.4 percent, from their last close.

The U.S. has told countries to cut all imports of Iranian oil starting from November, a senior State Department official said on Tuesday.

“Oil prices were flying higher overnight after catching an updraft from the U.S. administration calling for allies to cut Iran imports to zero tolerance,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA.

He also warned “Libya will continue to be a significant point of concern in the oil supply chain”.

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Iran, OPEC’s third biggest oil producer, exports more than 2 million barrels a day. OPEC and other oil producers including Russia agreed last week to ease production caps that have been in place for 18 months in order to prevent prices from spiking as Venezuela’s output continues to sink and the U.S. sanctions on Iran’s exports loom.

Eastern Libyan commander Khalifa Haftar announced on Monday that his army have handed control of oil installations to a separate National Oil Corporation (NOC) based in the east of the country.

The official state-owned oil company based in the capital Tripoli, also called NOC, will not be allowed to handle that oil anymore, he said.

The Organisation of Oil Exporting countries (OPEC)’s decide to raise output last week following a key meeting in Vienna. While the decision was widely anticipated, the supply boost was less than some investors had anticipated.