Oil prices rose to record highs while the Iranian currency tumbled on Wednesday, the day after US President Donald Trump's decided to unilaterally pull out the Iranian nuclear deal, bracing Iran for a potential economic crisis.
The dollar was being offered for as much as 75,000 Iranian rials, compared to around 65,000 just before Trump announced his decision on Tuesday night.
Dealers in Tehran quoted similar levels on Wednesday, according to an Iranian economist outside the country who is in touch with them. One dealer said the rial had hit 78,000, while another said he had made two sales of dollars at 80,000, Reuters reported.
The Iranian currency has been losing ground for months due to weak economic performance and heavy dollar demand among Iranians.
Demand hiked in direct proportions to Iranian fears of a US withdrawal from the deal.
Renewed US sanctions on Tehran could reduce the country's oil and other exports. The situation will aggravate as major European and American companies reconsider investment in Iran, and choose to wind up their operations.
Brent crude futures rose $2.36, or 3.2 percent, to settle at $77.21 a barrel. The global benchmark hit a session high of $77.43, the highest since November 2014. U.S. West Texas Intermediate (WTI) crude futures rose $2.08 to settle at $71.14 a barrel, a 3-percent gain.
Such figures represent the highest rates registered in four years, not only a result of US sanctions on Iran, but also a decline in American oil inventories.
Saudi Arabia is closely monitoring the impact of US withdrawal from the Iranian nuclear deal on oil supplies and is prepared to compensate for any possible shortage, but it will not act unilaterally.
“People shouldn’t take it for granted that Saudi Arabia will produce more oil single-handedly.
We need to assess first the impact if there is any, in terms of disruption, in terms of a reduction of Iran’s production,” an OPEC source told Reuters.
“We have managed to put together this new alliance between OPEC and non-OPEC. Saudi Arabia will not in any way act independently of its partners.”
