Oil hits $80 a barrel, highest price in almost five years

Oil prices topped $80 a barrel this week for the first time since November 2014.

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Oil climbed to $80.18 a barrel Thursday on Brent crude oil, the international benchmark for oil prices. This is the first time the rate has topped $80 a barrel since November 2014, according to experts, who attributed the price increases to rising concerns over the impact of newly restored sanctions on Iran.

U.S. sanctions on Iran went back into effect with President Trump’s withdrawal last week from the 2015 Iran nuclear accord, which had lifted sanctions in return for Iran dismantling its nuclear weapons program. Trump fully restored the pre-accord sanctions, a move that instantly outlaws billions of dollars of new international commerce with Iran that emerged following the accord.

That increased business included more Iranian oil entering world markets. Analysts said that the restored sanctions could wipe anywhere from 500,000 to 1 million barrels of Iranian oil from the market.

This reduces supplies in an already tightening marketplace in which major oil exporter Venezuela the OPEC nations have all been reducing production. The European Union is looking for ways to protect its companies who do business in Iran, but market analysts expect that Iran’s oil exports will nonetheless suffer as U.S. sanctions force shippers, insurers, and financial institutions instrumental for bringing Iranian oil to world buyers to leave Iran.

Some companies are already discussing closing up shop. French energy company Total said Wednesday that it may abandon a multibillion-dollar gas project in Iran if the United States won’t issue it a waiver from sanctions.

“It’s becoming clearer that they will have a problem and oil will be coming off the market,” said John Kilduff, founding partner at energy hedge fund Again Capital.

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