Oil prices were pushing to fresh 3½-year highs on Tuesday, as investors fretted over the future output from Iran and Venezuela, on the prospect of new U.S. sanctions on those countries.
June West Texas Intermediate crude CLM8, +0.39%[1] on the New York Mercantile Exchange rose 29 cents, or 0.4%, to $72.53 a barrel. On Monday, the contract closed at $72.24 a barrel, a gain of nearly 1.4%, which marked the highest finish for a front-month contract since Nov. 26, 2014.
July Brent crude LCON8, +0.28%[2] , the global benchmark, rose 21 cents, or 0.3%, to $79.43 a barrel, after closing up 71 cents to $79.22 a barrel on Monday.
Oil prices rallied Monday[3] over concerns that the U.S. will impose new sanctions on Venezuela, specifically on its oil industry, after President Nicolás Maduro won a second six-year term on Sunday.[4] The election of Maduro, who has presided over the country’s economic collapse, was boycotted by the opposition and condemned as a sham by the U.S. and other countries.
On Monday, U.S. President Donald Trump issued an executive order “prohibiting certain additional transactions”[5] with respect to Venezuela. In part, it bans the U.S. purchase of any debt owed to the government of Venezuela.
Sanctions on Venezuela’s oil industry could intensify worries about a drop in global supply, adding to those around the Trump administration’s withdrawal from the Iran nuclear deal and reimposition of sanctions on Tehran.
Read: Iran vows to stand by nuclear deal if EU helps it offset U.S. sanctions[6]
The White House laid out new demands for Iran on Monday[7]. It said any new nuclear deal with the U.S. would require Iran to stop enriching uranium and to pull its support for militant groups in the Middle East.
Iran immediately rejected those demands. “The world of today doesn’t accept that the U.S. decides for the world,” said Iranian President Hassan Rouhani, according to The Wall Street Journal. “Who are you to decide for Iran and the world?”
In other energy contracts, June gasoline RBM8, +0.01%[8] was flat at $2.2583 a gallon, while June heating oil HOM8, +0.02%[9] was stable at $2.2749 a gallon. June...