Oil prices ease as Iran says prepared to take steps to reach deal with US

By Scott DiSavino and Siddharth Cavale

NEW YORK, Feb 24 (Reuters) – Oil prices closed down 1% on Tuesday after Iran said it was prepared to take any necessary steps to reach a nuclear deal with the U.S., after weeks of increased military deployment by the U.S. in the Middle East.

Brent futures settled at $70.77 per barrel, down 72 cents, or 1%. WTI futures also fell 1%, settling at $65.63, down 68 cents.

Iran, the third-biggest crude producer in the Organization of the Petroleum Exporting Countries, and the U.S. will hold a third round of nuclear talks on Thursday in Geneva, Oman’s Foreign Minister Badr Albusaidi said on Sunday.

The U.S. wants Iran to give up its nuclear program, and has sent aircraft carriers, warships and jets to the region.

Iran has denied it is trying to develop an atomic weapon, and its deputy foreign minister said on Tuesday that Tehran was ready to reach a deal to lower tensions between the two countries.

Swiss bank UBS said it expected a modest decline in oil prices in coming weeks provided there was no escalation of tensions in the Middle East that could disrupt supply.

U.S. crude prices include a $3-$4 a barrel geopolitical risk premium because of tensions between the U.S. and Iran, the director of North Dakota’s Mineral Resources Department said on Monday. North Dakota is the No. 3 U.S. oil-producing state. The oil industry needs crude prices to rise and sustain at $70 per barrel in order to grow output, energy executives said.

The U.S. State Department is pulling non-essential government personnel and their families from the U.S. embassy in Beirut, a senior official said on Monday, as concerns mount about the risk of conflict with Iran, which, sources said, was close to a deal with China to purchase anti-ship cruise missiles.

U.S. TARIFFS AND OIL SUPPLIES

Meanwhile, the U.S. began collecting a temporary new 10% global import tariff on Tuesday, but President Donald Trump’s administration was working to increase it to 15%, a White House official said, sowing confusion over tariff policies after last week’s Supreme Court defeat.

Trading houses and buyers of Venezuelan oil have chartered the first very large crude carriers to export from the South American country since a Caracas-Washington supply deal began. This is set to speed up shipments from March while boosting deliveries to India, according to sources and data.

The European Commission will submit a legal proposal to permanently ban Russian oil imports on April 15, three days after Hungary’s parliamentary election, according to EU officials and a document seen by Reuters.

Russia’s oil pipeline monopoly Transneft has cut crude intake into its system by some 250,000 barrels per day, two sources familiar with the situation said on Tuesday, a day after Ukrainian drones attacked a pumping station serving major oil hubs and ports.

U.S. OIL INVENTORIES

U.S. crude stocks rose while gasoline and distillate inventories fell last week, according to market sources, citing American Petroleum Institute figures on Tuesday. Crude stocks rose by 11.43 million barrels in the week ended February 20, much higher than the 1.5 million barrels analysts projected energy firms added to storage. [EIA/S] [API/S]

Wednesday will bring official U.S. oil inventory reports from the Energy Information Administration. 

(Reporting by Scott DiSavino and Siddharth Cavale in New York and Shadia Nasralla in London, additional reporting by Trixie Yap in Singapore and Anushree Mukherjee in Bengaluru, editing by Jan Harvey, Chizu Nomiyama, Alex Richardson and David Gregorio)