Oil holds near four-year highs as Saudi, Russia agree supply rise

Oil held near four-year highs on Thursday, supported by the imminent loss of Iranian supply through U.S. sanctions, but also tempered by the prospect of a rapid production boost from Saudi Arabia and Russia.

Brent crude oil futures LCOc1 were down 16 cents at $86.13 a barrel by 0914 GMT, having risen to a late 2014 high of $86.74 the day before.

U.S. crude futures CLc1 were also down 16 cents, at $76.25.

“Prices will probably rise further into overshoot territory. Once we see $90 I would expect decisive supply reaction,” Commerzbank strategist Carsten Fritsch told the Reuters Global Oil Forum.

“Major economies won’t let oil prices rise to triple digits and harm economic growth.”

Nitin Gadkari, India’s transport minister, said on Thursday his country faced “economic crisis” due to its huge oil imports, two local TV channels reported.

India imports more than 4 million barrels per day (bpd) of oil and is one of the biggest buyers of Iranian crude, along with China, and has been hurt by a slide in the rupee against the dollar.

Saudi Energy Minister Khalid al-Falih said on Thursday OPEC was able to raise output by 1.3 million bpd, but offered no signal that the producer group would do so.