Oil prices steady near 1-mth high on US-Iran sanctions; OPEC+ meeting awaited

Investing.com-- Oil prices moved little in early Asian trading on Wednesday, steadying near a one-month high after fresh U.S. sanctions on Iran’s oil industry pushed up expectations of tighter crude supplies. 

Focus was now squarely on an upcoming meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+), where the cartel is widely expected to leave production quotas unchanged after a series of hikes this year.

Brent Oil Futures steadied at $69.12 a barrel, while West Texas Intermediate crude futures were flat at $65.09 a barrel by 20:22 ET (00:22 GMT). Both contracts had surged to a one-month high on Tuesday and remained close to the level on Wednesday. 

US imposes tighter sanctions on Iranian oil; India talks eyed 

The U.S. Treasury Department on Tuesday imposed restrictions on a network of companies and vessels led by an Iraqi-Kittian businessman for transporting Iranian oil disguised as Iraqi crude. 

The move is the latest round of U.S.-led restrictions on Iran’s oil industry, and comes after nuclear talks between Washington and Tehran largely collapsed earlier this year. Stricter sanctions on Iran herald tighter oil supplies in the coming months.

Focus was also on potential bilateral trade talks between India and the U.S., after Washington slapped the South Asian country with 50% tariffs over its purchases of Russian oil.

U.S. scrutiny invited European sanctions against a major Indian oil refinery, which could further disrupt global supplies. Saudi Arabia and Iraq were seen stopping oil shipments to Indian refiner Nayara this week. 

India has so far shown little intent in stopping its buying of Russian oil, given the country’s large dependence on energy imports. Indian Prime Minister Narendra Modi was also seen meeting Chinese and Russian leaders earlier this week. 

OPEC+ meeting, US inventories awaited 

Focus in the coming days will be on an OPEC+ meeting, scheduled for September 7, for more cues on oil supplies.

Investors expect the OPEC+ to leave output unchanged after sharply hiking production earlier this year, as the cartel wound down over two years of steep supply cuts. 

But the producer group may now seek to limit further increases in oil supplies, given that prices have remained weak for most of the year.

Before the OPEC+, focus this week is also on U.S. inventory data, which comes amid an end to the travel-heavy summer season. Demand in the world’s biggest fuel consumer is expected to have cooled in recent weeks. 

Inventory data from the American Petroleum Institute and the Energy Information Administration is due on Thursday and Friday, respectively.