Toughened sanctions against Iran helped push up oil prices over the weekend, lighting a fire under London-listed exploration companies today.
The cost of international standard Brent crude has risen 2.9 per cent over since Friday, hitting $74.68 per barrel – its highest point since October.
The increase proved a major boost for mid-market oil and gas companies in London, with North Sea explorer Enquest soaring 7.96 per cent to 23.06p per share.
Growth at the oil majors was slightly more modest, with Shell rising just over two per cent and BP up 2.36 per cent to 581.1p.
“With the oil majors, I think we’ve seen them having a fairly big ramp up earlier in the year. The mid caps and the smaller caps tend to have a slightly lagged effect,” Fiona Cincotta, market analyst at City Index, told City A.M.
Prices rose after the administration of US President Donald Trump demanded that the eight countries still buying Iranian oil stop by 1 May or face the consequences.
The US re-imposed sanctions against Iran in November when it unilaterally pulled out of an agreement between Iran and six world powers to limit the country’s nuclear programme.
Meanwhile a threat from Iran to close the Strait of Hormuz, a key route for international oil, to international shipping was labelled unacceptable by US officials, Reuters reported yesterday.
“If that threat does come about that has the potential to tighten oil prices even more,” Cincotta said.