London: Oil rebounded back above $109 (Dh400.4) a barrel on Tuesday, lifted by renewed geopolitical concerns, a day after prospects for a resumption of Libyan supply prompted its biggest daily fall in nearly a month.
Hopes for a relaxation of sanctions on Iran later this year, enabling the Islamic republic to sell more oil, were dampened after the United States targeted companies from China and Dubai for allegedly helping Tehran evade weapons and oil sanctions.
That sent a signal that Washington will keep pressure on Iran over its nuclear programme.
The stand-off between Russia and Western powers over Ukraine also showed no sign of abating, adding to concerns that the conflict will ultimately lead to the disruption of some oil supply due to tighter sanctions.
Hundreds of pro-Russian separatists stormed the regional government headquarters in Ukraine’s eastern city of Luhansk on Tuesday, gaining access by breaking windows and facing no resistance from police.
“The market is paranoid about Ukraine tensions in the short run,” said Andrey Kryuchenkov, analyst at VTB Capital.
