Brent crude oil prices have hit $80 a barrel for the first time since November 2014, with geopolitical concerns helping to drive up the price. US sanctions on Iran, the continuing collapse of Venezuela, rising Middle Eastern tensions, and 17 months of OPEC supply constraints have all played a role in pushing prices back upwards.
On top of these issues, global growth appears strong, which naturally drives energy demand. But in areas with more sluggish growth, like the UK in recent months, rising costs could apply a further dampener to consumer spending. An additional factor in the medium term may be a revival in the US shale sector, where low prices in recent years have constrained supply.
Analysts believe that global political uncertainty is likely to remain a factor for the foreseeable future. However, some of the fallout from Iran may only directly impact prices in the short run if Chinese producers pick up the slack left as western firms like Total leave Iran.