Oil prices shoot to 2019 highs on Iran crackdown

LONDON — World oil prices struck fresh 2019 peaks on Tuesday, boosting energy shares prices.

Crude futures extended Monday's sharp rally, which was triggered by a US crackdown on Iranian oil exports.

Brent North Sea crude reached $74.70 per barrel on Tuesday, the highest point since early November.

WTI hit a similar near six-month high at $66.19 per barrel. 

"UK markets have returned from their long break with solid gains for the FTSE 100, led by strength in oil stocks, thanks to the surge in crude prices over the past 24 hours," noted Chris Beauchamp, chief market analyst at IG trading group.

Brent had rallied more than $2 per barrel on Monday and WTI jumped $1.70. 

The White House on Monday announced it was calling an end to six-month waivers that had exempted countries from unilateral US sanctions on Iranian oil exports.

Starting in May, these countries — China, India, Turkey, Japan, South Korea, Taiwan, Italy and Greece — would face sanctions if they continue to buy oil from Iran.

"This points to a big drop in the supply side, which boosts the commodity's price," said Margaret Yang Yan, market analyst at CMC Markets Singapore.

"Iran's daily oil output amounts to 1.3 million barrels, according to latest figures in end March." 

But she added that "the sustainability of oil's rally depends on Saudi and other OPEC members' actions to increase oil supply in the month to come".

Stephen Innes, head of trading and market strategy at SPI Asset Management, said rising crude prices meant $80 per barrel was now a "possibility".

"Oil quickly repriced higher on fears that markets could face an immediate supply crunch, adding more pressure to the already tenuous global supply squeeze," he added.

Energy and oil-linked shares jumped on Tuesday, with Tokyo-listed crude developer Inpex rallying 2.8 per cent and oil refiner JXTG up 1.1 per cent.

In London, BP shot up 2.4 per cent and Shell jumped 2.3 per cent — also as European stock markets reopened following the long Easter holiday weekend and before a deluge of corporate results this week.

"Some of the world's biggest technology companies are reporting earnings this week as well as a raft of the big European banks," Nick Twidale, chief operating officer at Rakuten Securities Australia, said in a note to clients. 

"Investors will be hoping for some better-than-expected results from both groups to keep the topside momentum in global equities."

Separately, Sri Lanka's stock market slumped 3.6 per cent as the Colombo Stock Exchange reopened for trading after terror attacks on Easter Sunday killed more than 320 people.