Oil recovers as markets weigh potential easing of US sanctions on Iran

Brent recovered from two days of decline, climbing to $61.24 per barrel on Thursday as markets weighed the potential easing of US sanctions against Iran. The European benchmark, against which more than half of the world's oil is priced, lost 2.5 per cent to $61 per barrel on Wednesday, following US President Donald Trump’s comments that he could consider easing sanctions to secure a meeting with Iran. “We’ll see what happens,” Mr Trump said at the White House. “I do believe they’d like to make a deal. If they do, that’s great; and if they don’t, that’s great too. But they have tremendous financial difficulty, and the sanctions are getting tougher and tougher,” he added. The comments come a day after the dismissal of US National Security Adviser John Bolton who championed "maximum pressure" campaign against Iran, which included driving its oil exports down to zero. The departure of Mr Bolton, whose hawkish stance brought the US and Iran close to full-blown military conflict, was widely seen by the markets as easing of some of the geopolitical risk built into prices. It is, however, too early to judge whether Mr Bolton's ouster from the administration is sign of a shift in the US policy towards Iran. Brent closed in the negative on Tuesday at $62.38 per barrel after news of Mr Bolton’s leaving was made public, ending five consecutive days of gains for Brent. Meanwhile, Iraqi Oil Minister Thamir Ghadhban told Platts late Wednesday that any possible easing of sanctions for Iran is unlikely to prompt the Opec+ alliance to deepen ongoing production cuts, over fears of Iranian supply flooding a market that is already facing a surplus. "It's a point to think about, but I don't think it will be on the table tomorrow,” he told reporters. The alliance headed by Saudi Arabia and Russia, which has cut back 1.2 million barrels per day of output since January, is meeting today s in Abu Dhabi to discuss the markets and their pact.