Oil prices rise due to tension in Iraq, fear of US sanctions against Iran

Oil prices rise due to tension in Iraq, fear of US sanctions against Iran
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Singapore: On Monday, the price of oil jumped due to escalating tensions in Iraq and fear of US sanctions against Iran.

According to the report published in Arab News, Brent crude futures, the international benchmark for oil prices, went up by 1.1 % when compared to previous rates. Oil prices are at $57.82.

As per traders’ opinion, worries of US sanctions against Iran led to price rise.

On Friday, US President Donald Trump ignored the advice of worried allies and decertified Iran’s compliance with the 2015 agreement despite international inspectors say it is.

Under the deal, a number of international sanctions against Tehran were lifted in return for Iranian curbs on its uranium enrichment.

The Republican-controlled Congress will now have to decide whether to reimpose sanctions on Iran. However, if this step is taken, it would almost certainly doom the agreement.

According to analysts, new sanctions would have a huge impact. One of the advisers said that if the agreement is revoked, it will lead to a steep rise in crude oil prices.

Instability in Iraq

Escalating tensions in Iraq is another concern. Iraqi forces seized the Kirkuk governor’s office, key military sites and an oil field on Monday as they swept across the disputed province following soaring tensions over an independence referendum.

The rapid advance, involving troops, tanks and armoured vehicles, aims to recapture oil and military targets that Kurdish forces took over during the fightback against the Islamic State group (IS).

It may be mentioned that Iraq is the second largest oil producer within OPEC.