Iran sanctions could push oil prices above $100, strategists say

Atta Kenare | AFP | Getty Images

Iranian Revolutionary Guards drive a speedboat in front of an oil tanker at the port of Bandar Abbas.

President Donald Trump’s sustained bid to sanction Iranian crude exports could trigger a dramatic shortfall in global supply, strategists told CNBC on Thursday, amid renewed worries oil prices could soon rally up to triple digits.

Earlier this week, Trump urged OPEC to ramp up production levels in order to prevent further price rises ahead of the mid-term elections in November.

But OPEC and non-OPEC producers were thought to be unlikely to immediately respond to Trump’s demands, after Saudi Arabia and its allies decided against pressing for an official increase at a meeting in Algeria last week.

“The unwillingness of the 25 producing nations to declare their intention to ramp up production in their effort to replace Iranian barrels all of the sudden produced a very tight supply and demand balance for the fourth quarter of this year,” Tamas Varga, senior analyst at PVM Oil Associates, said in a research note published Thursday.

“As a result, the talk is now (of) Brent reaching $100 a barrel this year,” he added.

International benchmark Brent crude traded at around $81.87 on Thursday, up around 0.65 percent, while U.S. West Texas Intermediate (WTI) stood at $72.32, more than 1 percent higher.