By Georgina McCartney
HOUSTON (Reuters) -Oil prices settled up more than 1% a barrel on Tuesday after the U.S. imposed sanctions targeting Iran’s oil revenue stream, and ahead of an OPEC+ meeting on Sunday where analysts expect the group will not unwind remaining voluntary cuts.
Brent crude settled up 99 cents, or 1.45%, at $69.14 a barrel.
U.S. West Texas Intermediate crude settled at $65.59 a barrel, $1.58 or 2.47% higher. WTI futures did not settle on Monday due to the U.S. Labor Day holiday.
The U.S. Treasury Department on Tuesday sanctioned a network of shipping companies and vessels led by an Iraqi-Kittitian businessman for smuggling Iranian oil disguised as Iraqi oil.
The administration of President Donald Trump is keeping pressure on Iran while nuclear talks have stalled. A sixth round of negotiations was suspended after the start of a 12-day war in June.
“The U.S. cracking down on Iranian exports was definitely supportive of prices today,” said Phil Flynn, senior analyst with Price Futures Group.
INVESTORS EYE UPCOMING OPEC+ MEETING
Meanwhile, investors will monitor a meeting of eight members of the Organization of the Petroleum Exporting Countries and their allies on September 7.
Analysts said they believed the group would not unwind the remaining voluntary cuts in place from the eight members, including Saudi Arabia and Russia, which were supporting the market and keeping prices in the $60 a barrel range.
OPEC+ might wait for more data after the conclusion of the U.S. summer driving season before it makes its next move, independent analyst Gaurav Sharma said, given an expected supply surplus in the last quarter of the year.
Saudi Aramco and Iraq’s state oil company SOMO have stopped selling crude oil to India’s Nayara Energy in the aftermath of sanctions imposed in July by the European Union on the Russian-backed refiner, three sources familiar with the matter said.
“The market is starting to wonder how that will impact flows. There is some concern about availability in the non-sanctioned pool of oil which may be becoming more dear supply-wise, as there is going to be less opportunity to buy these grey market barrels if sanctions ratchet up,” said John Kilduff, a partner at Again Capital.
Investors also considered the Shanghai Cooperation Organisation summit 2025, which took place from August 31 to September 1. It was attended by Chinese President Xi Jinping and Russian President Vladimir Putin, who pressed their vision for a new global security and economic order that prioritises the “Global South”, in a direct challenge to the United States.
The two-day event was attended by more than 20 leaders of non-Western countries, including India’s Prime Minister Narendra Modi, who is visiting China for the first time in seven years.
The conference may force U.S. President Donald Trump to react and could spur more secondary sanctions, especially on India, lending some support to oil prices according to Kilduff.
“This was an important conference that was not on everyone’s radar as it should have been,” Kilduff said.
Elsewhere, India is in talks with the U.S. for a bilateral trade agreement, India’s trade minister Piyush Goyal said on Tuesday, days after Washington doubled tariffs on goods from India as a punitive measure for New Delhi’s continued importation of Russian oil.
Expectations that U.S. data will show another crude draw were also boosting the market, UBS analyst Giovanni Staunovo said.
The U.S. summer driving season – the highest demand period in the world’s largest fuel market – officially ended with Monday’s Labor Day holiday.
On the supply side, Ukrainian drone attacks have shut down facilities accounting for at least 17% of Russia’s oil-processing capacity, or 1.1 million barrels per day, according to Reuters calculations.
Meanwhile, Kazakhstan’s daily crude oil output, excluding gas condensate, a type of light oil, rose to 1.88 million barrels per day in August from 1.84 million bpd in July, a source familiar with the data told Reuters on Tuesday.
Kazakh crude oil output last month rose 2% from July on a daily basis, according to Reuters calculations.
(Reporting by Georgina McCartney in Houston, Seher Dareen and Enes Tunagur in London, Anjana Anil in Bengaluru and Colleen Howe in Beijing; Editing by Alexandra Hudson, Emelia Sithole-Matarise, Barbara Lewis, Tomasz Janowski, Bill Berkrot, Edmund Klamann, Rod Nickel)
