Oil prices slip over speculation on US sanctions against Iran

Oil prices dropped to a low for the first time in about three and half years over speculations of a US-led sanction against Iran over the nuclear deal.

The US West Texas Intermediate (WTI) slipped by one percent to $70 per barrel. Brent crude features, however, fell by 0.8 percent to $75.54 after hitting $76.17 per barrel in the previous
session.

Trump is likely to either announce he will not be renewing a waiver on, leading to a “significant reduction” in Iranian oil sales within six months or will restate his opposition to the nuclear agreement, Barclays Research analysts said in a note.

“Regardless, his foreign policy continues to ignite tensions in the main oil-exporting center and is, thus, price supportive,” they said.

If Trump restores core U.S. sanctions, under U.S. law he must wait at least 180 days before imposing their furthest-reaching measure, which is to target banks of nations that fail to significantly cut their purchases of Iranian oil.

Analysts at RBC Capital Markets said Iran’s exports could be cut by 200,000 to 300,000 bpd as a result. Iranian officials, however, said that the country’s oil industry would continue to develop even if the United States exits the accord.

Trump has repeatedly threatened to withdraw from the deal unless France, Germany, and Britain – which also signed the agreement – fix what he has described as its flaws.