US oil is on the backfoot for the end of the week in prospects of Iranian supply

• WTI crude for April delivery closed down US$2.93 to US$107.67 per barrel while spot trades near $108.04.
• A deal to allow the return of Iranian supplies to the global market is nearer.

The price of US oil is off by some 3% as West Texas Intermediate (WTI) crude fell off decade highs on Thursday following reports that a deal to allow the return of Iranian supplies to the global market is near.

Traders are looking for supplements that can replace Russian exports that have been cut by sanctions imposed on the country following its invasion of Ukraine. 

WTI crude for April delivery closed down US$2.93 to US$107.67 per barrel while spot trades near $108.04 after sliding from a high of $116.51 and hitting a low of $106.45. The reports that began circulating on Twitter in the European and US sessions of an imminent Iran nuclear deal to remove sanctions on its oil exports lifted the black gold. 

''Due to a combination of financial sanctions and the increasing reluctance of companies to do business with Russia, we estimate Russia’s oil supply could already be down by 1mb/d. Overall, nearly 5mb/d of Russian crude could be struggling to find a buyer,'' analysts at ANZ Bank explained.

''Prices eased back from their highs after IAEA chief Rafael Mariano Grossi said his trip to Tehran could pave the way to reviving the Iran nuclear deal. This could see the return of the country’s oil output to the international market.''

''Even so, it might take until the end of the year for Iran to ramp up exports by a potential 1mb/d. There are also other supply issues to navigate.''