By 06:45 GMT, Brent crude slipped 16 cents, or 0.2%, to $68.98 a barrel, while U.S. West Texas Intermediate (WTI) crude dipped 13 cents, or 0.2%, to $65.46. Both benchmarks had settled more than 1% higher in the previous session.
The upward momentum was driven by Washington’s move to sanction shipping companies and vessels allegedly disguising Iranian crude as Iraqi oil, in a network led by an Iraqi-Kittitian businessman. Analysts say the development points to the potential for tighter supply in the months ahead.
“Structural volatility persists, with sanctions on Iran and geopolitical flashpoints shaping the risk premium and keeping crude anchored near recent strength,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Attention is now shifting to the September 7 meeting of eight OPEC members and their allies. Market watchers largely expect the group to maintain current output levels, despite ongoing geopolitical uncertainty.
“Geopolitical risks continue to influence oil price trends. The market is eyeing the upcoming OPEC meeting and remains on edge for further increases leading to an oversupply,” noted Emril Jamil, senior analyst at LSEG.
Also supporting crude prices were expectations of a drawdown in U.S. oil inventories. A preliminary Reuters poll suggested that crude stockpiles fell by about 3.4 million barrels in the week to August 29, alongside declines in gasoline and distillate inventories.
However, soft economic indicators tempered gains. U.S. manufacturing contracted for a sixth straight month, with analysts pointing to tariff pressures under President Donald Trump’s trade policy as a factor weighing on business confidence and oil demand.
With sanctions, supply risks, and economic concerns all in play, analysts expect oil to remain volatile as markets await OPEC’s next move.