LONDON: World oil prices surged Friday as the appointment of ultra-hawkish John Bolton as US national security advisor sparked fears over crude exports from key OPEC producer Iran.
The market also jumped on the back of the faltering greenback, which makes dollar-denominated oil cheaper for buyers using stronger currencies.
In late afternoon deals, European benchmark Brent North Sea crude for May delivery traded near two-month highs, soaring $1.24 to $70.15 a barrel compared with Thursday’s close.
US benchmark West Texas Intermediate for the same month meanwhile rebounded $1.21 to $65.51 per barrel.
President Donald Trump has named hardline Fox News pundit and former UN ambassador John Bolton, 69, as his new national security chief, ousting embattled army general HR McMaster.
Thursday’s shock appointment of Bolton, regarded by many as the hawk’s hawk, calls the future of a landmark deal to curb Iran’s nuclear programme into serious doubt — and continued to send shockwaves through the oil market on Friday.
“Oil prices are getting a tail wind from a weaker US dollar (and) the appointment of John Bolton as Trump’s new National Security Advisor,” CMC Markets analyst Michael Hewson told AFP.
“The appointment of Mr Bolton, who is no fan of the Iran nuclear deal, has prompted concern about renewed efforts to overturn the nuclear deal that has seen Iranian exports return to the market.”
Neoconservative Bolton — who has championed pre-emptive strikes against North Korea and regime change in Iran — will now frame the security decisions that make it to Trump’s desk.
The news — the latest in a cascade of Trump’s staff changes — came just days after he replaced secretary of state Rex Tillerson with another Iran hawk, CIA director Mike Pompeo.
“It is difficult to find more hawkish than Bolton and almost impossible to find any article that does not associate his name with either ‘war’ or ‘bomb’, and usually those words are also associated with ‘Iran’,” noted Petromatrix analyst Olivier Jakob.
“Combined with the nomination of Mike Pompeo, another hawk, at the State Department, most of the market will conclude that at the minimum the Iranian nuclear deal is dead.
“The only contrarian argument that we can find is that President Trump does not always listen to his advisers, but it is difficult to build a trading strategy based on that.”
Added to Iranian worries on Friday, the United States imposed sanctions on ten Iranians and an Iranian company for alleged hacking of hundreds of universities in the US and abroad and the theft of “valuable intellectual property and data.”
Source: Brecorder.com
