Oil falls over Ukraine summit plan and hopes for Iran nuclear deal

Melbourne — Oil prices fell on Monday on a plan for US President Joe Biden and Russia's Vladimir Putin to hold a summit on the Ukraine crisis and on prospects of a nuclear deal between Iran and world powers in the next week or two.

The office of French President Emmanuel Macron said in a statement on Monday he had pitched to both leaders a summit over “security and strategic stability in Europe”. The White House said Biden has accepted the meeting “in principle” but only “if an invasion hasn't happened”.

Brent crude futures fell 73c or 0.8% to $92.81 at 4.24am after having jumped more $1 than to $95.00 in early trade, its highest level since Wednesday.

US West Texas Intermediate (WTI) crude futures similarly fell 52c or 0.6% to $90.55 a barrel after having hit a high of $92.93.

Oil markets have been jittery over the past month on worries a Russian invasion of its neighbour could disrupt crude supplies, but price gains have been limited by the possibility of more than 1-million barrels a day of Iranian crude returning to the market.

A senior EU official said on Friday a deal to revive Iran's 2015 nuclear agreement is “very very close”.

Analysts said the market remain tight, and any addition of oil will help, but prices will remain volatile in the near term as Iranian crude is likely on to return later this year.

“There's just so many pressures geopolitically it's difficult to know what the answer is [on market movements] — with Ukraine and Iran,” said National Australia Bank commodity analyst Baden Moore.

European Commission president Ursula von der Leyen said Russia will be cut off from international financial markets and denied access to major exports needed to modernise its economy if it invades Ukraine.

“If a Russian invasion takes place as the US and UK have warned in recent days, Brent futures could spike above $US100/bbl, even if an Iranian deal is reached,” Commonwealth Bank analyst Vivek Dhar said in a note.

Reuters