The price of oil hit a four-year high yesterday, rising above $70 a barrel for the first time since 2014.
Even after falls of almost 1% this morning, the price of a barrel of Brent crude now stands at $75.43 - up about 12% on the start of the year.
Much of the recent surge is down to expectations that Donald Trump could be about to withdraw the US from the Iran nuclear deal, with markets assuming that the return of US economic sanctions would disrupt output from the world’s third biggest oil exporter.
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CNN Money says this could affect as many as one million barrels per day of crude supply. Although some American allies, including India, Japan and South Korea, are expected to follow suit and cut off Iran, the effect could be tempered if the EU and China stick to the agreement and decide not to reimpose sanctions.
As well the short-term impact of the US withdrawing for the 2015 agreement, prices have been lifted by strong global demand and supply cuts agreed last year by Opec and other major oil producing countries such as Russia.
However, Fortune says Opec appears split on future cuts, with Iran wanting to see crude prices held at $60-$65 a barrel, while its great regional rival, Saudi Arabia, has said it is aiming for $80.
Another factor influencing oil prices is the deteriorating situation in Venezuela. According to Reuters, the country’s output has halved since the early 2000s to 1.5 million barrels per day, hit by a lack of investment in the oil industry.
US output, meanwhile, has soared by more than a quarter over the past two years.