Oil prices climbed this morning amid fears that incoming US sanctions on Iran are likely to reduce crude volumes significantly.
Brent crude oil futures were at $75.19 (£58.59) per barrel earlier today, rising 0.6 per cent from their last close, while US West Texas Intermediate (WTI) crude futures were up 0.7 per cent.
Brent is also on track for a 4.7 per cent weekly increase, while WTI is set for a 3.7 per cent weekly rise.
US investment bank Jeffries said today: "Third-party reports indicate that Iranian tanker loadings are already down by around 700,000 barrels per day (bpd) in the first half of August relative to July, which if it holds will exceed most expectations.
"We expect that by quarter four the market will be dealing with either undersupply, dwindling spare capacity – or both".
The news comes a day after British Airways and Air France announced they will stop flying to Iran next month, as both airlines warned that the route was no longer "commercially viable".
Read more: Premier Oil drills down to double profits
Iran, which is the third largest producer within the Organisation of the Petroleum Exporting Countries (Opec), exported roughly 2.5m bpd of crude and condensate this year, equivalent to around 2.5 per cent of global consumption.
Yet White House sanctions, which came in on the back of Donald Trump’s decision to tear up the US nuclear deal with Iran, are likely to prompt many businesses to step back from investment in the country.
On Wednesday White House national security adviser John Bolton said the US is prepared to use sanctions to drive Iranian oil exports down to zero.