North Sea explorers get boost as US clamps down on Iran oil exports

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.

Read more: FTSE 100 climbs to fresh six-month high as oil giants surge

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.

It also helped Premier Oil, up 5.42 per cent, Cairn Energy, which rose 4.77 per cent. While Petrofac and rose 1.95 per cent and Tullow increased by 2.85 per cent.

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.

Meanwhile the news hit companies which have to pay for fuel. Easyjet fell 3.69 per cent while British Airways owner IAG fell 3.45 per cent to 538p.

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.

Read more: Oil prices reach fresh 2019 high as US tightens sanctions on Iran

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.