Oil prices have reached their highest level in more than two years as the International Energy Agency (IEA) warned of a global supply crunch.
Oil futures in New York rose 1.6% to close at $75.25 U.S. a barrel on Tuesday (July 13), the highest level since October 2018.
In a new report, the IEA said crude oil supplies are set to "tighten significantly" amid a deadlock among members of the OPEC+ alliance. At the same time, a stalemate over whether to revive the Iran nuclear deal has reduced the threat of that country flooding the global market with oil.
Oil futures clung to their gains after the American Petroleum Institute reported U.S. crude oil supplies fell by four million barrels last week and inventories declined at the nation’s biggest storage hub located in Oklahoma.
Oil prices have surged more than 50% this year as vaccination rollouts accelerated the reopening of economies, boosting fuel consumption. OPEC+ and allied crude producers have supported prices by taking a gradual approach to resurrecting shuttered supplies.
However, the oil consortium has been deadlocked in recent weeks on increasing production due to a dispute between the United Arab Emirates and Saudi Arabia. Both countries have locked in stable crude output for August.
Meanwhile, nuclear talks between world powers and Iran are unlikely to resume until after the Islamic Republic installs a new president next month, all but eliminating the chances of an early revival of the accord that could trigger a jump in Iranian oil exports.
West Texas Intermediate crude oil for August delivery traded at $75.14 U.S. a barrel in after-market trading after settling at $75.25 U.S. on the New York Mercantile Exchange. Brent crude oil futures for September settlement advanced $1.33 U.S. to end the latest trading session at $76.49 U.S.
