The oil price has surged higher in today’s trading session after ana announcement by the US administration that they plan to cut the Iranian oil exports to zero in the nearest future.

US President Donald Trump announced that he will not extend the special waivers that countries such as Japan, China, India and South Korea among others have enjoyed to import oil from Iran without fear of repercussions from the U.S government.

The waivers are due to expire in the first part of May which means that the respective countries have less than a month to keep buying Iranian oil with the main aim of the Trump administration being to cut of Iranian oil completely from the world market

"The goal remains simple: to deprive the outlaw regime of the funds it has used to destabilize the Middle East for decades," noted US Secretary of State Mike Pompeo

The move by Trump adds to a range of issues which has driven the oil price higher in recent months and this new situation may be the catalyst to move the price higher as the year unfolds.

“Crude oil’s near-40% rally from the December low has resulted in both WTI and Brent clawing back half the losses seen between October and December. With global demand growth holding up despite the prospect for lower global growth, the market has instead been left to focus on a near-perfect storm of price-supportive supply news,” said Ole Hansen, Head of Commodity Strategy at Saxo Bank

“With Opec continuing to cut production and the US forcing down exports from Iran and Venezuela, only a major change in the outlook for demand will alter the current positive sentiment,” he added.