An oil well is seen near Denver, Colorado. Picture: Reuters
An oil well is seen near Denver, Colorado. Picture: Reuters

Singapore — Oil was steady on Tuesday, supported by looming US sanctions against Iran’s petroleum industry.

But prices were capped by signs that increased supplies by other major producers, including the US and Saudi Arabia, could make up for the disruptions from Iran.

US West Texas Intermediate (WTI) crude futures were at $67.61 a barrel at 1.12am GMT, up 7c from their last settlement.

Brent crude futures climbed 11c to $77.48 a barrel.

"It was a mixed performance in the crude oil market," ANZ bank said in a note, pointing to Washington’s sanctions against Iran’s oil exports that will be enforced from November.

Washington is putting pressure on other countries also to cut imports from Iran. Close allies such as South Korea and Japan, but also India, are showing signs of falling in line.

ANZ bank said prices were capped "amid speculation later in the day that Saudi Arabia and Russia will fill any gap".

US energy secretary Rick Perry met Saudi energy minister Khalid al-Falih on Monday in Washington, the US energy department said, as the Trump administration encourages big oil-producing countries to keep output high ahead of the renewed sanctions.

Perry will also meet with Russian energy minister Alexander Novak on Thursday in Moscow.

Russia, the US and Saudi Arabia are the world’s three biggest oil producers by far, meeting about a third of the world’s daily crude consumption of almost 100-million barrels a day.

Combined output by these three producers has risen by 3.8-million barrels a day since September 2014, more than the peak 3-million barrels a day Iran has managed during the last three years.

Big US discount

With Middle East crude markets tightening because of the US sanctions against Iran, many Asian refiners are seeking alternative supplies, with South Korean imports of US crude expected to hit a record in November.

At the same time, American oil producers are seeking new buyers for crude they used to sell to China before orders virtually dried up because of the trade disputes between Washington and Beijing.

Traders said this pulled wide open the discount of US WTI crude versus Brent to almost $10 a barrel, the biggest since June.