Brent crude oil jumped 1.5 percent to above $80 a barrel on Tuesday, supported by concern that falling Venezuelan crude output and a potential drop in Iranian exports could further tighten global supply.
Brent crude futures rose $1.19 to $80.41 a barrel, a 1.5 percent gain, by 11:12 a.m. EDT (1512 GMT). Last week, the global benchmark topped $80 for the first time since November 2014.
U.S. West Texas Intermediate (WTI) crude rose 59 cents to $72.83 a barrel, a 0.8 percent gain. It earlier touched $72.83 a barrel, highest since November 2014.
The U.S. government imposed new sanctions on Venezuela following Sunday`s re-election of President Nicolas Maduro, a move that analysts say could further curb the country`s oil output, already at its lowest in decades.
"The impact is more fear-related that we’ll see more barrels come off the market," said Rob Haworth, senior investment strategist for U.S. Bank Wealth Management.
Also supporting prices is the concern about a potential drop in Iranian oil exports following Washington`s exit from a nuclear arms control deal with Tehran.
On Monday, the United States demanded that Iran make sweeping changes - including dropping its nuclear program to pulling out of the Syrian civil war - or face severe economic sanctions. Iran dismissed Washington`s ultimatum and one senior Iranian official said it showed the United States is seeking "regime change" in Iran.
Venezuela and Iran are members of the Organization of the Petroleum Exporting Countries, which with its allies has curbed production since January 2017 to get rid of a supply glut that in mid-2014 led to a price collapse.
Due in part to the involuntary drop in Venezuela`s output, OPEC is over-delivering on the agreement. Saudi Arabia and other major OPEC producers could in theory add more supply, but have yet to do so.
The OPEC-led supply curbs have largely cleared an inventory surplus in industrialised countries based on the deal`s original goals, and stocks continue to decline.
U.S. crude stockpiles are forecast to have declined by 2.8 million barrels last week, which would be the third straight weekly fall. The American Petroleum Institute`s inventory report for the period is due at 4:30 p.m. EDT (2030 GMT).
Limiting the upward pressure on prices is rising supply in the United States, where shale production is forecast to hit a record high in June.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)