Oil prices rose more than 1% and topped $80a barely on Monday, as Iran threatened to cut off energy supplies to Europe. Prices did later ease, following reports of slowing demand in China.
A senior military official from Iran had been quoted on Sunday that the country could cut supplies to Europe in order to make it suffer, and could also target any of its adversaries with its missiles.
There’s always a risk that tensions in the Middle East can have a real impact on the supply of oil and oil’s gains this morning are largely a knee-jerk reaction to Iran’s comments,” Toby Hassall, chief commodities analyst at CWA Global Markets Pty Ltd told Reuters.
“But the market needs to consider those comments in the context of the underlying fundamentals, where there is now spare capacity, so I think it’s a bit early to be concerned about supply disruptions.”
Iran is currently involved in a dispute with the United States and its allies over its nuclear energy programme. Countries in the West believe this programme has the aim of developing nuclear weapons, while Iran insists it is solely for power.
