Oil prices firm ahead of looming Iran sanctions

Oil prices are standing firm on Monday, August 6, 2018 with Spot Brent crude oil futures trading at $73.23 per barrel at 11:02 (GMT+5), up 2 cents from their previous close.

U.S. West Texas Intermediate (WTI) crude futures were up 15 cents, or 0.2 percent, at $68.64 per barrel.

After a temporary halt on oil shipment through the Red Sea shipping lane of Bab al-Mandeb after attacks on two pol tankers by Yemen’s Iran-aligned Houthi movement, Saudi Arabia announcement on the weekend that oil shipments on that route had been resumed.

Markets have also been anticipating an announcement from the Washington on Monday regarding renewed US sanctions on Iran, a major oil exporting country of the oil industry. According to a U.S. Treasury official, sanctions are due to be reinstated on Tuesday at 12:01 am EDT.

With the earnings season on, many US shale oil drillers have been marred by dismal quarterly results in recent weeks owing to rising operating costs and a fall in crude prices from the 2018 highs.

Outside of the US, Saudia Arabia has been suffering from a dip in oil production in July. According to two OPEC sources, Saudi Arabia pumped around 10.29 million barrels of crude per day in July, down from 2 million bpd in June.

Earlier in June, OPEC had pledged to raise output from July, while Saudi Arabia extended the greatest support and promised a “measurable” supply boost.

Currently, United States, Russia and Saudi Arabia are all producing around 10-11 million bpd of crude, supporting a third of the global oil demand alone.