Oil hits $77 on Iran crisis

Oil rallied yesterday after US president Donald Trump’s decision to walk away from a nuclear deal with Iran.

Brent crude hit $77 as the market came to terms with a US message that buyers of Iranian crude have six months to curb purchases.

US Treasury Secretary Steven Mnuchin

Oil majors Shell and BP were up by over 3% in London as the US sanctions against Iran, an Opec member, are expected to tighten global oil supply.

The decision by president Trump to reimpose sanctions will affect many big businesses around the world.

Some sanctions take effect after a 90-day ‘wind-down’ period ending on August 6, and the rest, most notably on the petroleum sector, after a 180-day wind-down period ending on November 4.

Both deadlines are meant to give firms and other entities time to conclude trade and other business activities with or in Iran.

In aviation, US Treasury Secretary Steven Mnuchin said Airbus and Boeing will lose licences to sell passenger jets to Iran.

IranAir had ordered 200 passenger aircraft — 100 from Airbus, 80 from Boeing and 20 from Franco-Italian turboprop maker ATR.

German carmaker Volkswagen, which began exporting cars to Iran last year, said it was closely monitoring and reviewing political and economic developments.

The French carmakers, including Renault, have pushed hard into Iran after sanctions were lifted following the 2015 nuclear pact.

PSA has signed production deals worth €700m to reclaim the leading position it once had in the market, while Renault invested to increase production capacity to 350,000 vehicles a year.

Nestle said there are no direct implications for its business at this stage, but said it was continuing to closely follow political developments.

Nestle operates two factories in Iran, producing infant cereals and formula and bottled water.

German engineering group Siemens said it would closely monitor the situation in Iran and was assessing the implications of the Iran decision.

Siemens signed a contract in October 2016 to upgrade Iran’s railway network and also to supply components for 50 diesel-electric locomotives to Iran.

In the oil and gas industries, Trump’s decision could scupper French oil major Total’s multibillion-dollar gas project in Iran unless it can secure a waiver.

Reuters and Bloomberg

Related Articles

Iran gives green light to Opec oil output cut plan

At least two dead in Iran suicide car bomb attack

Iranian president warns of ‘war situation’ as US reimposes sanctions

Iran president puts country on war footing as US sanctions take effect

More in this Section

Munster rugby star turned luxury watchmaker launches instore collection

Shannon Airport predicting high passenger numbers over Christmas

Cork Airport expected to have 150,000 passengers over Christmas period

Rolls-Royce to shift UK design approval to Germany amid Brexit fears


7 of the most head-scratching crimes of fashion committed in 2018

Child’s love for Mary Poppins: UK children's Laureate breaks down the iconic nanny's reboot

Stepping out of the shade: Choose colour for this years festive partywear

More From The Irish Examiner