The Danske Bank analysts mainly attribute the latest strength in Brent oil to broad-based US dollar weakness induced by the dovish Fed. But the escalating US-Iran geopolitical tensions also continue to underpin.

“The US is planning more sanctions against Iran in order to force the country back to the negotiating table and agree on a deal to ensure Iran never requires nuclear weapons. Iran has already seen a sharp drop in oil production following the first round of US sanctions, which has tightened world oil supply. New sanctions are therefore likely to be felt primarily in Iran and to a lesser extent in the rest of the world.”