Oil soars as US quits Iran nuclear deal

LONDON, May 9 (Reuters): Crude oil prices jumped back to 3-1/2-year highs on Wednesday after President Donald Trump pulled the United States (US) out of an international nuclear deal with Iran, while the dollar continued its tireless ascent and world stocks held steady.

Trump's move sparked worries about fresh tension in the Middle East and uncertainty over global oil supplies.

Demand for safe-haven assets remained limited, however, as the price of gold XAU= retreated and bond yields fell. The US 10-year Treasury US10YT=RR breached the key 3 per cent level once more and was last at 3.0080 per cent, a two-week high, supported by expectations of higher interest rates.

Caroline Simmons, deputy head of the UK chief investment office at UBS Wealth Management, said that while generally central banks tend to look through the oil price in terms of its impact on inflation, it is still of note to market watchers.

Reports from Singapore, New York and Tokyo add: Asia's petroleum refiners are scrambling to find alternative supplies as they prepare for renewed US sanctions against major oil exporter Iran amid an already tight market.

Iran is the third-largest oil producer in the Organisation of the Petroleum Exporting Countries (OPEC) and a major supplier, especially to refiners in Asia.

The United States plans to impose new unilateral sanctions after abandoning an agreement reached in late 2015 which limited Iran's nuclear ambitions in exchange for removing joint US-Europe sanctions, which included strict curbs on crude oil exports.

Iran's economy relies heavily on oil revenue. New US sanctions will include measures aimed at its petroleum and shipping sectors.