Oil hovers close to $80 amid growing supply concerns

“Iran is increasingly becoming the preoccupation of the crude market. The last couple of weeks have seen the expected squeeze on Iranian crude flows taking shape, with overall outflows down markedly,” consultant JBC Energy said.

‘Fragile’ market

Russian energy minister Alexander Novak on Wednesday warned of the effect of US sanctions against Iran.

“This is a huge uncertainty on the market — how countries, which buy almost 2-million barrels a day of Iranian oil, will act. The situation should be closely watched, the right decisions should be taken,” he said.

Novak said global oil markets were “fragile” due to geopolitical risks and supply disruptions.

Should markets overheat and prices spike, however, Novak said Russia could increase its output.

“Russia has the potential to raise production by 300,000bbl/day mid-term, in addition to the level of October 2016,” he said.

That month Russia produced 11.247 million barrels a day, a post-Soviet Union record-high.

Oil markets were also watching Hurricane Florence offshore the US amid surging demand for gasoline and diesel, although crude output will not be affected on the storm’s current route.

The storm is expected to make landfall on the US East Coast on Friday.

Reuters