The news came as Mobil announced 4,000 job losses from its worldwide workforce in a cost-cutting drive to save hundreds of millions of dollars.
The price of Brent futures rose to about $19.40 per barrel at one point yesterday, compared with an average of less than $17 in the first quarter of the year, although City analysts said it is not clear whether the increase would be sustained.
The US has had a ban on Iranian oil since 1987, but companies have been able to trade through their operations overseas. US firms buy about $4bn worth of Iranian crude a year - accounting for one quarter of the amount exported - although sales have been dropping back as companies anticipated an extension on the embargo.
Groups to be hit include Exxon, Mobil, Texaco and Chevron. Industry sources said the US oilfield services sector would lose out to European rivals not constrained by the embargo and that jobs would go.
It remains unclear, however, whether there will be any impact on big European companies such as Shell and British Petroleum, which have significant activities in North America. There is some political support in the US for banning the trading activities of any firm which deals with Iran, even if they are domiciled overseas. President Clinton is believed, however, to be against extending such controls to foreign-owned companies.
A spokesman for BP said the company could not comment until the detail of President Clinton's plan had been analysed. Shell International said: "It is a political matter and not one we have a view on."
Iran produces 3.5 million barrels a day, of which 2.5 million are exported. Analysts said other countries are unlikely to join the ban. There is also a view that the US oil firms will be able to find alternative sources of crude in the Middle East and Russia.
Philip Morgan of Paribas Capital Markets said: "There is a lot of nervousness and uncertainty. The price has gone up, but the fundamentals suggest it could come down again quite sharply. Other analysts also said it was too early to assess the implications of the US clampdown.
The oil debacle coincided with Mobil's announcement of job cuts. It will shed 4,000 jobs from its worldwide workforce of 51,000. The move, which targets support staff, will save the group $750m a year. Mobil said it expects to take a $300m after-tax charge in the second quarter of the year.
About 850 of the jobs will be lost in Europe, but the impact, if any, on the UK is not yet known. Mobil will phase out its research and engineering centre at Princeton, New Jersey, and will move the activities to similar facilities elsewhere.Reuse content