After four week of gains in a row, crude oil prices spiked on Monday, with Brent registered fresh November highs at $73.65. Since the early rally, prices have settled around the $73 handle and remain elevated as traders are digesting news from the US.
The latest surge was fueled by reports that the US is set to end sanction waivers on the eight countries which import crude oil from Iran within the sanctions reimposed in November, after Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers.
Further drop in Iranian exports would continue to squeeze supply in a market which is already tightened due to the U.S. sanctions on Iran and Venezuela, unrests in Libya and Nigeria, as well as OPEC+ efforts.
Should Washington officially confirm the latest reports on Iran, Brent could jump even higher, on expectations of even tighter global supply, while some unexpected twists in the statement may send the futures lower amid profit-taking.