Oil rises to within four-year high as producers resist output increase to offset Iran sanctions

Brent crude futures were at $81.42 per barrel at 0315 GMT, up 22 cents, or 0.3 percent, and close to the intraday peak reached the previous day of $81.48, the highest since November 2014.

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Oil benchmark Brent rose for a second day on Tuesday, remaining within range of a four-year high reached during the previous session.

Looming US sanctions against Iran and the unwillingness or inability of the Organization of the Petroleum Exporting Countries (OPEC) and top oil producer Russia to raise output to offset the loss of Iranian supply have spurred prices higher.

Brent crude futures were at $81.42 per barrel at 0315 GMT, up 22 cents, or 0.3 percent, and close to the intraday peak reached the previous day of $81.48, the highest since November 2014.

US West Texas Intermediate (WTI) crude futures were at $72.26 a barrel, up 28 cents, or 0.3 percent from their last settlement.

The United States from Nov. 4 will target Iran’s oil exports with sanctions, and Washington is putting pressure on governments and companies around the world to fall in line and cut purchases from Tehran.

“Iran will lose sizeable export volumes, and given OPEC+ reluctance raise output, the market is ill-equipped to fill the supply gap,” Harry Tchilinguirian, Global Head of Commodity Markets Strategy at French bank BNP Paribas, told the Reuters Global Oil Forum on Tuesday.

OPEC+ is the name given to the group of oil producers, including Russia, that agreed to curtail output starting in 2017.

While Britain, China, France, Germany, Russia and Iran on Tuesday said they were determined to develop payment mechanisms to continue trading despite the sanctions by the United States, most analysts expect Washington’s actions to knock between 1 million and 1.5 million barrels per day (bpd) of crude oil supplies out of markets.

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