World oil price could hit $100 a barrel next year

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This is undoubtedly bad news for India, and it's policymakers as they have to prepare for another boot of increase in crude oil price.

The threat of new sanctions comes amid an oil market that has been tightening due to strong demand and as top exporter Saudi Arabia and top producer Russian Federation have led efforts since 2017 to withhold oil supplies to prop up prices. This was the biggest level after November 2014. The interview was conducted before Trump said an announcement on Iran was imminent. The country retaliated by striking dozens of targets inside Syria though it termed it as an oversight.

In an address to the nation from the White House, President Trump said, the United States will withdraw from the Iran nuclear deal and warned countries against any cooperation with Tehran on its controversial nuclear weapons programme.

But while China on May 9 became the last of the world powers that signed the 2015 agreement to say it will honor the pact despite the USA decision to withdraw, Iranian rival Saudi Arabia said that it will support the US withdrawal by making up for any shortfall in Iran's oil production caused by renewed USA sanctions on Iran.

Ambassador Prince Khalid bin Salman responded on Twitter that the deal has only fueled Iran's expansionist ideological drives across the Middle East. As far as investors, they are still evaluating the complete impact of the American withdrawal from the accord.

Oil prices rose on May 10, heading for their largest weekly increase in a month, as the market prepared for potential disruption to crude flows from major exporter Iran in the face of U.S. sanctions.

Crude oil prices settled above $70 a barrel on Monday for the first time since late 2014. "And the Iranians must be held accountable for this", Jubeir told CNN.

Oil prices dipped on Friday, easing from multi-year highs in the previous session on hopes that alternative supplies could replace a looming drop in Iranian exports from USA sanctions, Reuters reports.

One factor that could prevent markets from tightening further is soaring USA oil output.

OIL: Prices of oil fell sharply before Trump's announcement but rebounded, with benchmark US crude oil jumping $1.58 to $70.64 per barrel in electronic trading on the New York Mercantile Exchange.

The Brent December 2019 futures contract is trading a full $6 lower than the December 2018 contract, the widest for any December/December spread since 2013. Hong Kong's Hang Seng index added 0.5 percent to 30,552.57 while the Shanghai Composite Index dipped 0.1 percent to 3,159.22.