Oil eases, but Iran sanctions keep prices near late 2014 highs

Oil prices eased on Wednesday but were still set for a fifth consecutive monthly quarter of gains, driven by an impending drop in Iranian exports in the last three months of the year when global demand heats up.

Brent crude futures were last down 21 cents on the day at $81.66 a barrel by 0923 GMT, having risen to $82.55 on Tuesday, its highest since November 2014, Reuters reports

U.S. crude futures were down 19 cents at $72.09 a barrel.

The United States will apply sanctions to halt oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), from Nov. 4. The pending loss of Iranian supply has been a major factor in the recent surge in crude prices.

Several big buyers of Iranian crude, such as a number of Indian refiners, have signaled they will wind down their purchases, yet the exact impact of the loss of Iranian barrels on the global market balance is not clear.

“Iran has the opportunity to channel oil through Iraq and they will still have some buyers in Asia. I’m not totally confident that exports are going to decline by 1 million barrels per day.

“It is quite a big unknown how big the impact will be but we’ve been cautious in calling for a very, very deep cut in exports. We think it might be more like 500,000 bpd, rather than 1 million bpd, like in the last round of sanctions,” he said.