Brent hits six-week high as US-Saudi talks raise Iran risk

Decision by US to leave Iran deal would lead to Opec member’s oil exports being curtailed

Brent crude extended gains as investors assessed geopolitical risks, with speculation that the US president and Saudi Arabia’s crown prince discussed countering the influence of Iran.

Futures rose as much as 1.2 per cent to a six-week high, after advancing 2.1 per cent on Tuesday. Donald Trump hinted at withdrawal from a deal curbing Iran’s nuclear programme as Saudi Arabia’s Mohammad Bin Salman began a US visit. Such a decision would raise the risk of the Opec member’s oil exports being curtailed by sanctions.

The spectre of conflict involving giant producers is jolting Opec and its allies held further discussions about changing the way they measure the impact of their production cuts, including proposals that would affect how quickly they hit their target, according to delegates from the group.

One option that Opec and non-Opec delegates discussed in Vienna on Monday is to continue measuring commercial oil inventories in developed economies against the five-year average, but without counting years of high stockpiles, the delegates said. Another option is to use a seven-year inventory average, they said. This would move their goal of reducing stockpiles to normal levels further from reach, potentially requiring a longer period of cuts to achieve it. Delegates also considered a period of more than seven years. prices, which have traded in a tight range since February. With the Organisation of Petroleum Exporting Countries and its allies concluding that the market will rebalance by the end of September, Citigroup Inc predicts oil’s recent “sideways” move is unlikely to last. Still, investors will be wary of growth in US supply, which has threatened to undermine Opec’s efforts global glut.

“The possibility of new sanctions on Iran has been the main issue in recent days,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Oil sanctions against Iran would have a greater impact in an undersupplied market than in an oversupplied one.” to eliminate a