SINGAPORE- Oil prices hovered near two-week highs on Monday following 6 percent gains last week, as geopolitical tensions heightened between western powers and major oil producers Russia and Iran, raising risks of supply disruption.
Brent crude futures climbed 13 cents, or 0.2 percent, to $75.30 a barrel while US West Texas Intermediate crude futures were at $71.38 a barrel, up 14 cents, or 0.2 percent.
Both contracts last week notched their biggest weekly gains since late September to reach their highest settlement levels since Nov. 7 after Russia fired a hypersonic missile at Ukraine in a warning to the United States and UK following strikes by Kyiv on Russia using US and British weapons.
“The recent exchanges indicate the war has entered a new and dangerous phase, raising concerns of disruptions to supplies,” ANZ analysts led by Daniel Hynes said in a note.
In addition, Iran reacted to a resolution passed by the UN nuclear watchdog on Thursday by ordering measures such as activating various new and advanced centrifuges used in enriching uranium.
“The IAEA censure and Iran’s response heightens the likelihood that Trump will look to enforce sanctions against Iran’s oil exports when he comes into power,” Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia said in a note.
Enforced sanctions could sideline about 1 million barrels per day of Iran’s oil exports, about 1 percent of global oil supply, he said. The Iranian foreign ministry said on Sunday that it will hold talks about its disputed nuclear program with three European powers on Nov. 29.
