Oil prices are falling as markets await Trump's decision on Iran
Oil prices fell from a three-and-a-half-year high on Tuesday as investors awaited US President Donald Trump's announcement on whether the United States would again impose sanctions on Iran that it suspended under Tehran's nuclear deal with world powers.
If the United States withdraws from an agreement that has limited Tehran's nuclear activities, Iran's crude exports could be affected, increasing supply in the oil market, which has begun to return to equilibrium after years of obscurity.
US WTI fell 63 cents, or 0.9 percent, to $ 70.10 a barrel by 0024 GMT.
And fell at a stage below $ 70 after exceeding the previous session that level for the first time since November 2014.
Brent crude fell 53 cents, or 0.7 percent, to $ 75.64 a barrel, after jumping 1.7 percent in the futures contract to $ 76.17 a barrel in the previous session.
Trump said on Monday he would announce his decision to stay in the nuclear deal or impose sanctions on Tehran at 1800 GMT on Tuesday, four days ahead of schedule.
Analysts at Barclays Research said Trump was likely to announce that he would not renew the suspension of sanctions, leading to a "significant drop" in Iran's oil sales within six months or once again asserting his opposition to the nuclear deal.
"Regardless, his foreign policy will continue to raise tensions in the main oil export hub and thus support prices," they said.
If Trump reinstates major US sanctions, he will have to wait at least 180 days under US law before imposing a far-reaching measure of influence, targeting banks of countries that are not committed to drastically reducing purchases of Iranian oil.
Analysts at RBC Capital Markets said Iran's exports could fall by 200,000 to 300,000 barrels as a result. But Iranian officials said their country's oil industry would continue to develop even if Washington withdrew from the nuclear deal.
The sanctions imposed by the United States and the European Union on Tehran in early 2012 because of its nuclear program led to a drop in Iranian oil exports from a peak of 2.5 million barrels per day before sanctions to just over one million barrels per day.
But Iran emerged as a major exporter of crude in January 2016, when international sanctions were suspended in exchange for restrictions on its nuclear program.
Iran says it is seeking to increase its oil production capacity to 4.7 million bpd over the next four years.
The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have started cutting oil supplies from January 2017 in an effort to get rid of supply oversupply and raise prices. Participants in the reduction extended this agreement until December 2018 and will meet in June to review their policy.
In the meantime, Saudi Arabia, Iran's regional rival, has expressed a desire to continue to narrow the gap between supply and demand in crude markets.
The kingdom, the world's top oil exporter, has opposed the nuclear deal for fear it would boost Iran's economic power and allow it to increase funding for proxy conflicts in Lebanon, Syria, Iraq and Yemen.