Brent crude oil heads towards $80 per barrel as Total threatens to quit Iran – business live | Business

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The oil price is heading towards $80 per barrel for the first time since 2014, as Donald Trump’s decision to impose sanctions on Iran continues to reverberate through the financial markets.

French energy giant Total announced it would withdraw from a Iranian gas deal before the end of the year, unless it gets a waiver.

In a statement last night, Total explained:

Total will not continue the SP11 (South Pars 11) project and will have to unwind all related operations before 4 November 2018, unless Total is granted a specific project waiver by US authorities with the support of the French and European authorities.

This looks like a blow to Europe’s hopes of keeping its current economic ties with Iran intact, following America’s withdrawal from the Iranian nuclear deal earlier this month.

The SP11 agreement was signed last July, making Total the first major Western energy company to invest in the Islamic Republic since sanctions were lifted in 2016.

Now, though, Total is worried that it would be sanctioned by the US authorities if it kept dealing with Iran. The potential penalties from Washington simply look unpalatable.

The news sent Brent crude jumping to $79.47, a three and a half-year high. This puts $80 in traders’ sights – and leaving motorists facing higher prices at the pumps.

David Ingles

Perfect timing for #ThrowbackThursday because we’re headed back to the 80s. Brent is now just 60 cents short of crashing through 80 bucks.

May 17, 2018

Mihir Kapadia, CEO and founder of Sun Global Investments, agrees that geopolitical tensions are driving energy prices higher, with unrest is building in Venezuela ahead of this weekend’s presidential elections.

Kapadia explains:

Venezuela’s situation grows increasingly worrying and the expected drop in production from Iran means that prices are expected to reach four-year highs once again.

There are still concerns as to how increasing oil prices will affect the U.S. and global economy, and with tensions in the Middle East also growing, the next few months is likely to see the market become highly volatile.”

Also coming up today:

Britain’s bookmakers are reeling from the news that the maximum stake on their fixed-odds betting terminals (FOBTs) must be cut from £100 to £2, in an attempt to tackle the social damage caused by gambling.

It’s also a busy morning in the City, with estate agent Foxtons warning that the London property market remains “very challenging”, Ocado landing a partnership with US retailer Kroger, and Mothercare announcing the return of once-sacked CEO Mark Newton-Jones.

Holiday operator Thomas Cook and Royal Mail are also updating the market.

Mike van Dulken

Thomas Cook H1 pre-tax loss narrows; Summer bookings +13% (59% sold), FY trading in-line.

May 17, 2018

The agenda:

  • 1.30pm BST: US weekly jobless figures
  • 5pm BST: Bank of England chief economist Andy Haldane speaks in London

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