Oil prices exceeded $79 on international markets on Tuesday due to frequent supply disruptions, including the closure of an oil field in Norway due to a strike and halved production in Libya.
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On the London market, the price of a barrel rose by 96 cents compared to the previous close, reaching $79.03. On the American market, a barrel traded at a price 35 cents higher, at $74.20.
Market focus is on supply concerns further fueled by disruptions in supply worldwide. Production in Venezuela has collapsed due to insufficient investments, while Iranian exports are under the threat of U.S. sanctions.
The United States aims to completely block oil exports from Iran, the fifth-largest oil producer in the world, starting in November, which will require other major producers to increase production.
At the same time, the spare capacity of the Organization of the Petroleum Exporting Countries (OPEC) is almost fully utilized, and demand for oil is accelerating, notes Reuters.
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The market fears that Saudi Arabia – if it decides to compensate for reduced supply from Iran – will utilize all global spare capacities, meaning that markets will be even more vulnerable to additional or unexpected production cuts.
“The crux of the problem lies in the available spare capacity of OPEC… which has begun to attract market attention,” concludes Victor Shum from Singapore’s IHS.
