Title: Oil steadies on waning supply worries over Ukraine crisis

Feb 23, 2022 03:10AM ET

By: AnalysisWatch

Oil prices stabilised on Wednesday after hitting a seven-year high in the previous session as it became clear that the first wave of US and European sanctions against Russia for sending troops into eastern Ukraine would not affect oil supplies.

At the same time, prices were held in check by the possible return of more Iranian oil to the market as Tehran and world powers are close to reviving the nuclear deal.

At 0730 GMT, Brent crude was up 11 cents, or 0.01%, at $96.95 a barrel after climbing as high as $99.50 on Tuesday, its highest since September 2014.

U.S. West Texas Intermediate crude futures rose 6 cents, or 0.07%, to $91.97 a barrel after reaching $96 on Tuesday.

Prices jumped on Tuesday on concerns that Western sanctions on Russia for sending troops to two separatist areas in eastern Ukraine will hit energy supplies, but the United States has signaled that energy exports will not be affected.

The sanctions imposed on Tuesday by the United States, the European Union, Britain, Australia, Canada, and Japan targeted Russian banks and elites, while Germany halted a major gas pipeline project from Russia in response to one of Europe's worst security crises in decades.

Further weighing on prices was the possible return of more than 1 million barrels a day of oil from Iran, as diplomats said Iran and world powers were close to a deal to curb Iran's nuclear program.

The big unknown is how quickly Iran could actually increase its exports, said Vivek Dhar, a commodities analyst at Commonwealth Bank.

Other members of the Organization of Petroleum Exporting Countries and their allies, known collectively as OPEC+, are struggling to meet their production targets because of underinvestment in oil infrastructure, and Iran could face the same problem, he said.