Oil price rises toward $85 amid Iranian supply shortage

Oil prices on Thursday rose close to $82 a barrel amid fears of a supply shortage as the U.S. prepares to re-impose sanctions on OPEC’s third largest producer, Iran from Nov. 4.

Meanwhile, U.S. Energy Secretary Rick Perry has also ruled out using U.S. strategic crude reserves as a means of lowering the price.

Brent crude was up 0.71% to $81.36 a barrel from their last close, holding below the high of $82.55 reached Tuesday, the most since November 2014.

U.S. crude prices added on 0.99% to trade at $72.28, not far from Tuesday’s peak of $72.75, the highest level since July 11.

The impending loss of supply from Iran has seen oil prices rally, and the Organization of the Petroleum Exporting Countries and non-OPEC members, including Russia, have little spare capacity to boost output in order to offset falling global supply.

Earlier this week, U.S. president Donald Trump blasted OPEC and its refusal to step up oil production, telling the United Nations that OPEC members were “as usual ripping off the rest of the world”.

Trump, while speaking at the UN General Assembly said the U.S. was “not going to put up with . . . these horrible prices much longer”.

He also urged other countries to help squeeze the regime in Tehran by cutting oil imports from Iran.

While global markets are tightening increased domestic output means that U.S. supply remains plentiful.

The Energy Information Administration (EIA), in its weekly report on Wednesday said U.S. crude production hit a record 11.1 million barrels per day last week.

Crude oil inventories recorded a build of 1.85 million barrels to 395.99 million barrels last week, the EIA data showed, compared to expectations for a drawdown of 1.27 million barrels.

Gasoline, on the other hand rose from 0.37% to $2.0621 per gallon, while heating oil rose from 0.66% to $2.3188 a gallon.