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Oil prices rise as Iran tensions escalate and US-China trade negotiations show slow progress

By Ramla Soni

Russian economy will be affected by oil prices, says wealth fund chief

Oil prices have increased as Iran-related tensions escalate and US-China trade negotiations show slow progress.

With both West Texas Intermediate crude and Brent crude futures rising, the CEO of Russia’s wealth fund has said that oil prices will have an impact on Russian economy.

West Texas Intermediate crude futures traded up 23 cents, or 0.42 per cent, to $55.44 a barrel whilst Brent Crude futures were at $61.23 a barrel, up 32 cents, or 0.53 per cent in mid-afternoon trading GMT.

Kirill Dmitriev, the chief executive of the Russian Direct Investment Fund, told CNBC that the Russian economy would be heavily affected by oil prices, and described himself as “quite optimistic about the Russian market going forward.”

“Due to our agreement with Saudi Arabia we believe that oil prices will be stable and the Russian market (is) poised for continuous growth,” he said.

Meanwhile in Iran, petrol prices were increased by at least 50 per cent, provoking five days of protests, the worst in about two years Energy subsidies cost the Iranian government about $69 billion a year, according to one Iranian official, and have become increasingly difficult to fund as US sanctions have drained Iran’s $400 billion economy.

The sanctions have cut the country’s crude sales from 2.8 million barrels a day to less than 500,000, diminishing Iran’s foreign exchange earnings and driving up the price of most goods for the nation’s 83 million inhabitants.

FURTHER READING: Oil price rises after Iranian tanker attack

Elsewhere, oil inventories in the United States rose by six million barrels last week to 445.9 million.”

FURTHER READING: Iran finds new oil field with 53bn barrels, Rouhani claims

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