Crude oil prices in the US started the week by reaching 70 dollars a barrel, the highest level for nearly eight months. In London, Brent went even higher as Iran’s refusal to halt its nuclear programme increased fears of UN sanctions or even US military action. As tension over the issue has ratcheted up in the last month, the cost of Brent crude has risen from 64 dollars a barrel, to a new record high of 71 dollars and 40 cents at one stage on Monday.
Despite the high prices, world demand remains strong and Qatar’s oil minister, Abdullah al-Attiyah, said the Organization of the Petroleum Exporting Countries is unlikely to cut oil output for the rest of this year if that demand holds steady. He said OPEC ministers plan to consult informally this week at the International Energy Forum in Doha, but that the cartel is unlikely to take any action. The near-record cost of oil brought statements of concern from Japanese and Indian government officials about the potential impact on economic growth.