LONDON: Oil prices rose more than 3 percent on Wednesday to 3-1/2 year highs, after US President Trump abandoned a nuclear deal with Iran and announced the “highest level” of sanctions against the OPEC member.
Ignoring pleas by allies, Trump on Tuesday pulled out of an international deal with Iran that was agreed in 2015, a move that raises the risk of conflict in the Middle East and casts uncertainty over oil supplies in an already tight market.
Brent crude oil touched its highest since November 2014 at $77.20 a barrel. The benchmark contract was up $1.90 a barrel, or more than 2.5 percent, at $76.75 by 1335 GMT.
US light crude was up $1.70 a barrel, or almost 2.5 percent, at $70.76, near highs also last seen in late 2014.
In China, the biggest single buyer of Iranian oil, Shanghai crude futures hit their strongest in dollar terms since they were launched.
“Iran’s exports of oil to Asia and Europe will almost certainly decline later this year and into 2019 as some nations seek alternatives in order to avoid trouble with Washington and as sanctions start to bite,” said Sukrit Vijayakar, director of energy consultancy Trifecta.
Iran re-emerged as a major oil exporter in 2016 after international sanctions against it were lifted in return for curbs on its nuclear program, with its April exports standing above 2.6 million barrels per day (bpd).
That made Iran the third-biggest exporter of crude within OPEC countries, behind Saudi Arabia and Iraq.
Walking away from the deal means the United States will likely re-impose sanctions against Iran after 180 days, unless some other agreement is reached before then.
Analysts’ estimates of the possible reduction in Iranian crude supplies as a result of any new US sanctions range from as little as 200,000 bpd to as much as 1 million bpd, with most impact from 2019 as sanctions take time to be imposed.
Several refiners in Asia said on Wednesday they were seeking alternatives to Iranian supplies.
A number of countries have already cut reliance on Iranian oil, as well as other “traditional” sources of supply, due to surge in cheaper US crude exports.
All key crude oil futures contracts saw traded volumes jump as investors took new positions and refiners hedged to protect themselves from higher feedstock prices.
Saudi Arabia said it would work with other producers to lessen the impact of any shortage in oil supplies. The country has been leading efforts since 2017 to withhold production to prop up prices.
Oil prices jump after US walks away from Iran nuclear deal
Oil prices jump after US walks away from Iran nuclear deal
- Brent crude oil futures rise above $77, highest since 2014
- US sanctions likely to cut Iran oil supplies
Saudi Arabia, Japan trade rises 38% between 2016 and 2024, minister says
RIYADH: Trade between Saudi Arabia and Japan has increased by 38 percent between 2016 and 2024 to reach SR138 billion ($36 billion), the Kingdom’s investment minister revealed.
Speaking at the Saudi-Japanese Ministerial Investment Forum 2026, Khalid Al-Falih explained that this makes the Asian country the Kingdom’s third-largest trading partner, according to Asharq Bloomberg.
This falls in line with the fact that Saudi Arabia has been a very important country for Japan from the viewpoint of its energy security, having been a stable supplier of crude oil for many years.
It also aligns well with how Japan is fully committed to supporting Vision 2030 by sharing its knowledge and advanced technologies.
“This trade is dominated by the Kingdom's exports of energy products, specifically oil, gas, and their derivatives. We certainly look forward to the Saudi private sector increasing trade with Japan, particularly in high-tech Japanese products,” Al-Falih said.
He added: “As for investment, Japanese investment in the Kingdom is good and strong, but we look forward to raising the level of Japanese investments in the Kingdom. Today, the Kingdom offers promising opportunities for Japanese companies in several fields, including the traditional sector that links the two economies: energy.”
The minister went on to note that additional sectors that both countries can also collaborate in include green and blue hydrogen, investments in advanced industries, health, food security, innovation, entrepreneurship, among others.
During his speech, Al-Falih shed light on how the Kingdom’s pavilion at Expo 2025 in Osaka achieved remarkable success, with the exhibition receiving more than 3 million visitors, reflecting the Japanese public’s interest in Saudi Arabia.
“The pavilion also organized approximately 700 new business events, several each day, including 88 major investment events led by the Ministry of Investment. Today, as we prepare for the upcoming Expo 2030, we look forward to building upon Japan’s achievements,” he said.
The minister added: “During our visit to Japan, we agreed to establish a partnership to transfer the remarkable Japanese experience from Expo Osaka 2025 to Expo Riyadh 2030. I am certain that the Japanese pavilion at Expo Riyadh will rival the Saudi pavilion at Expo Osaka in terms of organization, innovation, and visitor turnout.”
Al-Falih also shed light on how Saudi-Japanese relations celebrated their 70th anniversary last year, and today marks the 71st year of these relations as well as how they have flourished over the decades, moving from one strategic level to an even higher one.
