On Tuesday oil prices increased to multi-month highs aimed Worries about sanctions on Iran and Venezuela, as well as turmoil in Libya, this also add to worries about the “potential for greater disruption” ahead for oil markets, says TD Energy Services’ chief strategist John Driscoll.
Driscoll’s remarks came following a fresh violent renaissance in Libya, which is a main oil producer in the OPEC. As well as Driscoll cited worries regarding Iran and Venezuela as other possible sources of threats for the oil markets.
Driscoll told CNBC’s things are terrible in Venezuela, oil production is falling, and Washington slapped sanctions in January on PDVSA in an effort to overthrow President Nicolas Maduro as he is with war for power with opposition leader Juan Guaido.
On the other hand he tension in Libya also add up to oil crisis, where Rebel armies loyal to renegade leader General Khalifa Hifter, who successfully controls the country’s east region, last week accelerate a surprise attack against the Libya’s UN renowned government. This will also increase risks of driving the country back into civil war.
If Libya comes into play, that would be only going to add more tension to the oil market.
Meanwhile, the U.S. continues to increase the pressure on Iran, on Monday Donald Trump tag Tehran’s Islamic Revolutionary Guard Corps an extremist group.
Tensions among U.S. and U.S. have crackled as the U.S. pull out from Joint Comprehensive Plan of Action in 2015 nuclear deal. The administration also re- imposed sanctions on Tehran’s crude exports, dealing a upset to the Iranian economy.
According to Driscoll, Mike Pompeo U.S. Secretary, comment on Iranian issue was delusional and possibly even unrealistic. Pompeo recently state that “complete obliteration of Iranian exports.”
Following increasing tension between Tehran and Washington, Driscoll this may result in Tehran loses patience and attempts to close the Strait of Hormuz, which is a main sea route for crude oil deliveries, consequence in the loss of a critical obstruct point where 30% of the world’s gas and oil passes.