The spread between the West Texas Intermediate and Brent Crude is at its widest in two years.
WTI has risen 5 percent and the Brent has outperformed with a gain of over 7 percent since U.S. President Donald Trump announced that the U.S. would withdraw from the 2015 Iranian nuclear deal and restore financial sanctions on Tehran.
Analysts expect oil to move higher. Oil could rise toward $90 a barrel after a move on Iran deal, Bernstein said. MUFG Bank forecast it to rise above $80 on unilateral U.S. sanctions.
What the market is looking at is rising U.S. production and Trump's comment on oil prices being too high.
Any policy changes by the U.S. administration would first impact WTI, said David Lennox, a resource analyst at Fat Prophets. Also, as the North Sea region matures, production should be constrained for Brent.
Sanctions against Iran will favour Brent from a supply view and that the return of sanctions was not expected, Lennox said in an emailed statement to BloombergQuint. He expects traders to chase the cheaper WTI and give up Brent.
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