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Oil prices hit Nov 2018 highs on report US will end Iran oil sanction waivers

Oil topped $74 a barrel on Monday, the highest since November, as the United States was set to announce a further clampdown on Iranian oil exports, tightening global supplies.

Singapore: Oil prices rose by more than 1 per cent on Monday to levels not seen since November 2018, driven up by a Washington Post opinion column that said the United States is preparing to announce all imports of Iranian oil must end or be subject to sanctions.

Brent crude futures rose above $72.90 for the first time since November 2018 on Monday, hitting a high of $72.93 shortly after 0100 GMT, high of $72.70 per barrel at 0115 GMT, up 1.3 per cent from their last close.

US West Texas Intermediate (WTI) crude futures rose above $64.80 per barrel, also to November 2018 highs, hitting $64.86 per barrel, up 1.3 per cent from their previous settlement.

The United States is preparing to announce on Monday that all buyers of Iranian oil will have to end their imports shortly or be subject to US sanctions, Washington Post foreign policy and national security columnist Josh Rogin wrote on Sunday.

Reuters was unable to independently verify the report. A State Department spokesman declined to comment.

The US reimposed sanctions in November on exports of Iranian oil after President Donald Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers.

Washington, however, granted Iran’s eight main buyers of oil, mostly in Asia, waivers to the sanctions which allowed them limited purchases for half-a-year.

The report comes amid an oil market that is already relatively tight.

Secretary of State Mike Pompeo will announce “that, as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate”, the Post’s columnist Josh Rogin said, citing two State Department officials that he did not name.

“The US chief Iran hawks indeed have the President’s ear as (Secretary of State) Pompeo and (National Security Advisor) Bolton are singularly focused on bringing Iran’s economy to its knees,” said Stephen Innes, head of trading at SPI Asset Management.

“Predictably oil prices are rising,” he said.

These potential disruption to Iranian supplies add to an already tight market.

The Organization of the Petroleum Exporting Countries (OPEC) has led supply cuts since the start of the year aimed at tightening global oil markets and to propping up crude prices.

In the United States, energy firms last week reduced the number of oil rigs operating by two, to 825, General Electric Co’s Baker Hughes energy services firm said in its weekly report on Thursday.

As a result, Brent prices have risen by more than a third this year, while WTI has climbed more than 40 per cent over the same period.