After reaching highs from November 2014 earlier this week, crude oil has continued to grow steadily in price. Apart from OPEC’s efforts to keep production levels low in order to alleviate oversupply issues on the oil market, the price is mostly influenced by political events.
The recent growth was brought about by the military strikes in Syria. Nevertheless, these tensions died out when it became clear than Russia will not retaliate and the United States will not strike anymore.
Right now the price of oil is finding stimulus in the fact that the United States will likely not continue the Iran deal. This agreement forced Iran to dramatically reduce the scope of its nuclear program, essentially making it less of a threat as a global player, in exchange for sanction waivers from a number of countries. Even though Iran has been diligently complying with the deal, President Trump and some of his top advisors have spoken multiple times against the deal, so it is expected that it will not be renewed by the deadline of May 12. If this happens Iran will quickly be in possession of nuclear weapons once again and the instability will increase in the region.
Another supporting factor for the price of oil is that the political problems of Venezuela are causing a drop in oil extraction. As stated before, any decreases in production push oil prices upwards.
The Brent crude reached 74.27 dollars per barrel, while the WTI brand was at $68.19.
