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US exit from Iran deal sparks oil shortage fears in Asia

Threat of further price increase looms over region's economies

Iran's oil exports are likely to fall due to renewed U.S. sanctions, causing a possible supply shortage.   © Reuters

TOKYO -- U.S. President Donald Trump's announcement on Tuesday that his country will withdraw from a nuclear agreement with Iran has triggered expectations for a surge in oil prices. Concerns are emerging that reimposing economic sanctions on Iran will hamper the Middle Eastern country's exports of crude, causing a supply shortage.

The Brent crude futures price touched the highest level since November 2014 on Wednesday, at $77.20 a barrel. Prices could rise further if major Asian consumers like China, India and Japan rush to procure supplies from alternative producers, potentially creating a head wind for the region's economies.

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