Oil extended gains after leaping to a six-month high Monday as the Trump administration said it will no longer give any country a pass on sanctions barring purchases of Iranian supply. Futures in London added as much as 0.5% today after US Secretary of State Mike Pompeo said any nation that continues to buy Iranian oil will face American sanctions. In response, Iran threatened to shut the Strait of Hormuz, a key maritime chokepoint for Persian Gulf producers, and said it’s engaged in “intensive” talks with partners to blunt the impact of Trump’s escalation.
Crude has rallied about 38% this year as OPEC and its partners embarked on their mission to cut output and curtail a global glut. Disruptions in Venezuela, Nigeria and Libya have helped further squeeze supplies.
