EUROPEAN diplomats unveiled an agreement to block imports of Iranian crude yesterday, sending oil prices soaring to a seven week high.
Brent crude futures touched $113.97 per barrel, up 2.4 per cent on the day, before settling at around $113.
Benchmark US crude edged over $103 after climbing more than $4 in the previous session. Prices eased later as investors cashed in on gains.
EU diplomats have yet to decide when sanctions against Iran should begin. On Tuesday the Middle Eastern state hit back against suggestions that the US military could transport an aircraft carrier into the Gulf Sea.
“The threat of another ‘super-spike’ in oil prices when the global economy is so fragile is itself a very powerful reason for the West to hold off from military action,” said Capital Economics.