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Speculations, hopes of alternatives to Iran supply dips recent highs on oil price to $70

After the unprecedented surge on US President’s pullout from 2015 Iranian nuclear deal earlier last week, oil prices began a dipping trend from Friday, easing from multi-year highs in the previous session on hopes that alternative supplies could replace any drop in Iranian exports from U.S. sanctions.

The United States plans to re-introduce sanctions against Iran, which produces around 4 percent of global oil supplies, after abandoning an agreement reached in late 2015 that limited Tehran’s nuclear ambitions in exchange for removing U.S.-Europe sanctions.

The sanctions come amid an oil market that has been tightening due to strong demand, especially in Asia, and as top exporter Saudi Arabia and No.1 producer Russia have led efforts since 2017 to withhold oil supplies to prop up prices. Brent crude futures were at $77.34 per barrel at 0451 GMT, down 13 cents, or 0.2 percent, from their last close. Brent the previous day hit its highest since November 2014 at $78 a barrel. U.S. West Texas Intermediate (WTI) crude futures were down 7 cents at $71.29 a barrel, still not far off Thursday’s November 2014 high of $71.89 per barrel. Many analysts expect oil prices to rise significantly, as the market adjusts to looming U.S. sanctions and Iran’s exports sink amid strong demand.

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