LONDON (Reuters) - Oil prices steadied below 3-1/2 year highs on Monday as resistance emerged in Europe and Asia to U.S. sanctions against major crude exporter Iran, while rising U.S. drilling pointed to higher North American production.
Brent crude was up 20 cents at $77.32 a barrel by 1315 GMT and U.S. light crude rose 10 cents to $70.80.
Both oil futures contracts hit their highest since November 2014 last week at $78 and $71.89 a barrel respectively as markets anticipated a sharp fall in Iranian crude supply once U.S. sanctions bite later this year.
It is unclear how hard U.S. sanctions will hit Iran’s oil industry. A lot will depend on how other major oil consumers respond to Washington’s action against Tehran, which will take effect in November.
China, France, Russia, Britain, Germany and Iran all remain in the nuclear accord that placed controls on Iran’s nuclear program and led to a relaxation of economic sanctions against Iran and companies doing business there.
Some oil analysts have said they expect Iranian crude exports to fall by as little as 200,000 barrels per day (bpd), while others put the figure closer to 1 million bpd.
Michael Wittner, analyst at Societe Generale, forecasts U.S. sanctions will remove 400,000-500,000 bpd of Iranian crude from the global oil market.