What nuclear race? This is an oil race for supply supremacy

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Bloomberg said India, China, Turkey, and Egypt are among those importing and paying more for oil and whose current account balance will be more vulnerable to rising USA interest rates.

Ignoring pleas by allies, US President Donald Trump on Tuesday pulled out of an worldwide nuclear deal with Iran that was agreed in late 2015, raising the risk of conflict in the Middle East and casting uncertainty over global oil supplies. That's up 27 percent since mid-2016 and means US output is creeping ever closer to that of top producer Russian Federation, which pumps around 11 million bpd.

On the bearish side some traders believe prices won't move almost as high because of rising US production and the possibility that other suppliers from within OPEC will step up output in order to counter the Iran disruption.

Analysts said the soaring prices were the result of an expected fall in Iranian oil exports.

The surge in oil prices comes at a time of tight supply amid record Asian demand and voluntary output restraint by the Organization of the Petroleum Exporting Countries and non-OPEC producers including Russian Federation.

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The official said that "Following the United States decision to withdraw from the nuclear agreement with Iran, Saudi Arabia is committed to supporting the stability of oil markets for the benefit of producers and consumers and the sustainability of the global economic growth".

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The Brent crude price leapt to $US77.97 a barrel overnight before slipping 0.5 per cent in Friday afternoon trading to $US77.22.

Oil prices have risen 14% this year, half of this increase reflects stronger global demand, a Bloomberg Economics model suggests.

It was the busiest day in USA front-month contracts since August, and for Brent the busiest in nearly a month. US light crude oil was down 5 cents at $70.65.

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During the last round of sanctions prior to the nuclear deal, Iran's oil supplies fell by around one million barrels per day.

"While oil prices have scope to venture higher in the near term on geopolitics, robust production from US Shale has the ability to limit gains down the road", Otunaga said.

A loss of 500,000 bpd of Iranian crude oil supply would push up oil prices by around $6.20 a barrel, according to Goldman Sachs.

Additionally, there are also some traders who believe soaring US crude oil production may also help fill Iran's supply gap.

This would make the United States the world's largest producer, ahead of both Russian Federation and Saudi Arabia.

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