>> Oil prices have returned to three and a half year highs and are predicted to rise even further now that the United States has withdrawn from the Iran nuclear agreement. Prices had briefly dipped on the day of the announcement, but then jumped back, partly because the return of US sanctions could limit Iran's ability to export its oil.
But also because of fears that the breakdown in diplomacy may bring even more volatility to the region, responsible for a third of the world's supply. Reuters energy editor, David Gaffin.>> This is likely to embolden, politically the hardliners in Iran more than they have been as a result because of the fact that their President Rouhani.
Was part of this deal and wanted to push it through to try to relieve sanctions from Iran. And if you have that removed, then they can credibly say, this isn't working, it's not helping our economy. And then you have people with a much more stride and stance potentially in place to take power or take power back at some point.
>> There's another possibility, that Iran might suddenly start flooding the market to get as much money as they can before any new sanctions take effect. That would actually plunge prices, but for now, most countries appear to be preparing for a spike.>> There's gonna be a lot of gnashing of teeth and back and forth, but the expectation essentially is that ultimately, this will pull supply off the market.
And if it does that, that is for the most part bullish for oil prices. You would expect oil to rise on that a few dollars.>> In related news there's a lot of uncertainty now for western businesses that deal with Iran. For example, US Treasury Secretary Steven Mnuchin has now said that Boeing, Airbus and a number of other planes manufacturers have had their licenses revoked for deals to supply passenger jets to an Iranian airline.
The companies stood to make a combined $38 billion.