An oil drilling rig in the North Sea. Credit: Erik Christensen.

Global oil prices surged close to six-month high after the US announced decision to end sanctions waivers on oil imports from Iran.

Brent crude oil futures jumped 0.7% to $74.57 per barrel, while US light crude increased 0.8% to $66.10 a barrel, reported Reuters.

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The US administration has asked all the countries that buy oil from Iran to stop purchases by 1 May 2019.

In November 2018, the US imposed sanctions of Iran’s oil exports over its nuclear programme. At that time, it granted a six-month waiver to eight countries allowing them to import limited Iranian crude.

“The oil market is already tightened due to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other allied countries.”

 

According to ship tracking and analyst data in Refinitiv, crude exports from Iran in April dropped to below 1 million barrels per day (Mbpd). Before the imposition of the US sanctions last year, the figure stood at around 3 Mbpd.

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The US is also working with key other oil exporters such as Saudi Arabia and the UAE to ensure the oil market is adequately supplied, reported Reuters.

The oil market is already tightened due to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other allied countries. Ongoing US sanctions on another key petroleum producer Venezuela have further squeezed supplies to the market.

The OPEC group and other participants are scheduled to meet in June to discuss the future of supply cut policy.