Here are the top risk events facing global oil markets
Brent traded at around $71.75 on Thursday afternoon, up around 0.2%, while WTI stood at $63.94, around 0.3% higher.
“I would say I am most worried about the role U.S. sanctions will play against Iran… It is the most important issue on the supply side and, of course, an incredibly complex one,” Cailin Birch, global economist at The Economist Intelligence Unit (EIU), told CNBC via telephone.
The “unpredictable nature” of U.S. foreign policy means there is a “major risk” the Trump administration will remove waivers against Iran next month, Birch said. On May 2, President Donald Trump must decide whether to extend waivers that allow several countries to import oil from Iran, which is under wide-ranging U.S. economic sanctions.
While the Trump administration has a “maximum pressure” policy towards Iran, the president says he issued waivers to eight countries in November in order to prevent oil prices from soaring. The exemptions are also seen as a way of managing relationships with foreign countries, most of whom oppose Trump’s Iran policy.
To be sure, analysts doubt Trump will refuse to extend the waivers, despite administration officials repeatedly invoking the administration’s goal of driving Iran’s oil exports to zero.