Wealth Management

Oil drops as Iran tension weigh against Russian output view

Oil barrel/Bloomberg

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Russia said that it’s taking wait-and-see approach on the OPEC+ output deal before the G-20 summit in Japan at which Trump will meet with Chinese President Xi Jinping.

Tuesday 25, June 2019

(Bloomberg) --Oil slipped after rallying almost eight per cent in three days as investors weighed mixed signals from the White House on Iran and signs that an extension of the OPEC+ production cuts may not be a fait accompli.

President Donald Trump imposed sanctions on Iran’s supreme leader, Ayatollah Ali Khamenei, while also asking in a tweet why the US is protecting the Strait of Hormuz, the world’s most important oil chokepoint.

Oil has jumped about 13 per cent since mid-June as rising tension between the US and Iran spurred concern there could be disruptions to global energy flows or even outright war. That reversed a decline driven by an escalation in the trade conflict between Washington and Beijing.

The Trump-Xi meeting this week and the gathering of the Organisation of Petroleum Exporting Countries and allied producers days later in Vienna may provide fresh direction for the market.

Trump said that the penalties would deny financial resources to Khamenei whom he accused for the hostile conduct of the regime, a move that analyst said could toughen Iran’s attitude toward talks with the US government.

Alexander Novak, Russia’s Energy Minister, said, “We need to wait until the G-20 leaders’ meeting” in Japan this week and see how the economic situation will develop.”

Saudi Arabia indicated earlier this month that it was sure the coalition will extend production cuts.

TAGS : OPEC+, US President Donald Trump, Arabian Gulf tension , Ayatollah Ali Khamenei, Strait of Hormuz, G-20 Summit

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