Oil prices up as US senate approves tougher Iran sanctions image

The United States Senate approved new sanctions against Iran’s energy sector in an effort to further pressure Tehran on its disputed nuclear programme.

The new package would extend sanctions to cover dealings with the National Iranian Oil Co and National Iranian Tanker Co, if they are deemed to be an agent or affiliate of the Revolutionary Guards. It aims to close a potential loophole that could have allowed Tehran to continue selling some of its oil using its own fleet.

Futures rose as much as 0.5 percent, extending yesterday advance, the first in seven days.

We’ve still got problems in the Middle East,” Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity- markets newsletter in Sydney, said in a Bloomberg Television interview.

“I can start to see a little level of optimism creeping into the market, and that should support the price. We are at the lower end, and I think we’re heading back through to $100 a barrel” for New York crude, he said.

However, in London oil prices fell below $109 a barrel on Tuesday as hopes for a cooperation deal over Iran’s disputed nuclear program eased concerns about major oil supply disruptions.

The head of the UN nuclear agency Yukiya Amano flew to Tehran on a delicate mission that – if successful – could finally lift the veil on whether Iran is seeking atomic arms.

After talks in Tehran between Amano and chief Iranian nuclear negotiator Saeed Jalili, “the decision was made… to reach agreement” on the mechanics of giving the IAEA access to sites, scientists and documents it seeks to restart its probe,” Amano told reporters at Vienna airport after his one-day trip to Tehran.

Worries about the loss of supply from Iran, OPEC’s second largest producer, have kept Brent futures prices in the $110-$128 range for most of 2012 as the European Union will impose a full embargo on Iranian oil imports from July and Washington is also pushing major Asian customers to cut Iranian oil purchases.