President Trump’s announcement that the US will withdraw from the Iran nuclear deal and reimpose the sanctions lifted in January 2016 has been criticised by the international community. Within the Middle East, however, Saudi Arabia, Egypt, the UAE and Bahrain have nodded their approval – seeing it, as Trump does, as a way to punish Iran for its ballistic missile programme.

The news has also kept the price of oil hovering at about $77 a barrel. That is 50 per cent above where it was 12 months earlier.

In the US, these higher oil prices are stimulating oil output, which the US Energy Information Administration says could hit 12 million barrels a day by the end of next year.

Attention is now focused on Iran’s response, but there is no more immediate consequence than the impact of Trump’s decision on world oil. History shows sanctions rarely work quickly and sometimes not at all. Iran will be hurt, but may not change course. But elevated oil prices almost always have an impact on world oil production capacity.

There is nevertheless growing private sector reluctance to invest in fixed oil and gas assets, and this trend might not be changed by the latest price bounce. Hydrocarbons are essential, but increasingly unpopular due to concerns about climate change and environmental pollution.

BP’s 2010 Gulf of Mexico oil spill cost the company about $60bn. It also demonstrated the scale of operational risks surrounding oil and gas production. And then there is oil industry political risk, which Trump’s actions against Iran have underlined.

You can make money from oil almost everywhere when it is more than $70 a barrel. But it is just two years since it slumped to under $30 a barrel – a level at which practically no one could turn a profit. Since 2000, the oil market has seen three price spikes and two slumps. Price fluctuations have never been greater, and you would have to be irrationally optimistic to believe the oil rollercoaster has stopped.

Opec estimates that more than $10 trillion will have to be invested to ensure production increases to meet projected world oil demand by 2040. It is unlikely the private sector, shaken by exceptional price volatility for almost two decades, will deliver more than a fraction of that figure. Government-owned and controlled companies will therefore have to do much of the heavy lifting when it comes to building the long-term oil and gas assets the world needs.

The policies of who may be America’s most business-minded president since Herbert Hoover are having perverse consequences by making it more difficult for business to do as much as it could, and encouraging greater state dominance in one of the world’s most important industries.