Iran’s decision to halt oil exports to British and French companies helped push the price of Brent crude to its highest in eight months
It went above $121 a barrel on Monday as Tehran retaliated for a European Union oil embargo over its disputed nuclear programme.
However Iran exports only very small amounts to the UK and France and European oil buyers cut their purchases months ago.
“Banning the tiny quantities of exports to the UK and France involves very little risk for Iran – indeed quite the opposite, it catches the headlines and leads to a higher global oil price, which is something Iran is very keen to encourage,” said Caroline Bain, commodities analyst at the Economist Intelligence Unit.
Fears of supply disruption in Iran and upbeat economic data from the world’s largest oil user, the United States, have pushed oil prices up over the past month.
In addition China’s central bank on Saturday cut the required reserve ratio of banks, boosting lending capacity by more than $50 billion and supporting demand outlook for commodities from the world’s second-largest economy.