The price of crude oil has hit its highest level in two and a half years following the unrest in Iran. Brent crude futures, the international benchmark, were at $67.07 a barrel, up 0.5 percent, after hitting a May 2015 high of $67.29 a barrel on Tuesday.
According to Reuters, Carsten Fritsch, an analyst at Commerzbank, warned that prices faced a correction as support lent by unrest in Iran will weaken unless the situation begins to affect oil production, which is not yet the case, or the United States re-imposes sanctions.
Commerzbank expected the crude oil price to reach $60 in 2018. Traders say that markets have risen recently, at a time when it is likely that the US production will increase again amidst doubts that the demand growth would continue at its current levels.
Potentially undermining the trend towards tighter market conditions is US oil production C-OUT-T-EIA, which has risen by almost 16 percent since mid-2016, hitting 9.75 million barrels per day (bpd) at the end of last year.
There have been some concerns that Russia might not abide fully by its pledges with OPEC to curb oil output up to 300,000 bpd from its highest monthly level in 30 years, reaching 11,247 million bpd in October 2016.
The latest data of 2017 showed that Russia oil output increased 10.98 million bpd as an average, compared to 10.96 million bpd in 2016, and 10.72 million bpd in 2015.