Oil Prices Scale Fresh 3-1/2-Year Highs As Rally Continues

Investing.com – Oil prices hit fresh three-and-a-half-year highs on Tuesday, as looming U.S. sanctions against Iran raised fears that markets will face shortages later this year when trade restrictions come into effect.

, the benchmark for oil prices outside the U.S., rose to a session peak of $79.22 a barrel at one point, a level not seen since November 2014. It was last at $79.00 by 8:05AM ET (1205GMT), up 80 cents, or about 1%.

Meanwhile, New York-traded were up 51 cents, or 0.7%, to $71.48 a barrel, not far off their Nov. 2014 high of $71.89 reached last week.

Worries about Iran have been key to oil’s recent surge to late-2014 levels.

Prices have rallied sharply since U.S. President Donald Trump walked away from an international nuclear deal with Iran last week and reimposed “the highest level of economic sanctions” against the country.

Some analysts have said the reinstatement of sanctions could lead to tighter global oil supplies as they make it more difficult for Iran to export oil.

Iran, which is a major Middle East oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC), resumed its role as a major oil exporter in January 2016 when international sanctions against Tehran were lifted in return for curbs on Iran’s nuclear program.

Exiting the deal leaves the U.S. at odds with Europe and other parties to the deal, who will try to keep it in place.

It may also increase tensions in the Middle East, especially between Israel and Iran.

Investors now looked ahead to fresh data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer.

Industry group the American Petroleum Institute is due to release its at 4:30PM ET (2030GMT). Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 1.4 million barrels.

Oil prices , after OPEC said a global glut has been virtually eliminated thanks in part to ongoing OPEC-led supply cuts and fast-rising global demand.

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