Brent crude reached $75 a barrel for the first time since October as the US decision to tighten Iran sanctions and contamination in Russian shipments fuelled supply fears.
Later, Iran’s foreign ministry said that it will not allow any country replace its oil sales in the global market.
Futures in London rose as much as 1.4 percent, gaining for a fifth session. Saudi Arabia on Wednesday responded to the US move to tighten sanctions on Iran, saying it saw no immediate need for action in the oil market. Separately, Russian crude deliveries to parts of Europe have been halted amid complaints of impurities.
Brent is set for a fifth straight week of gains, following the US announcement that it won’t renew waivers for countries to import Iranian crude after May 2. Still, questions are piling up over the ultimate impact, with Iran threatening retaliation, China declaring its right to purchase, and Saudi Arabia taking a cautious approach on raising its own output.
“We’re kind of waiting to see are the Iran sanctions real or is it Memorex?” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “The bulls are ready to take off in the oil market, but they may also pare down that long position quickly if we don’t really go anywhere.” Brent for June settlement rose 0.5 per cent to $74.97 a barrel on the ICE Futures Europe exchange as of 11.20 am in New York, after moving as high as $75.60.