Iranian crude exports might be affected, but analysts said it would also fan the flames of geopolitical tensions in the Middle East, which is home to a third of the world’s daily oil supply.
Brent crude futures were down 69 cents at $75.48 a barrel by 0910 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 86 cents to $69.87 a barrel.
Trump said on Monday that a decision on whether to remain in the Iran nuclear deal or to impose sanctions would be announced at 2:00 p.m. EDT (1800 GMT) on Tuesday, four days earlier than expected.
“Until we get more clarity on Trump’s intentions, we are unlikely to get further upside on crude,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore.
“If we assume he goes back to 2012 sanctions, we estimate a loss of 0.4 million barrels a day of Iranian supply based on recent Iranian export numbers. Anything larger than this will be bullish. “The geopolitical consequences of a possible dismantling of the (Iran deal) would likely to play a larger and long-lasting role in pushing oil prices higher than short-term policy uncertainty,” the bank said.
If Trump restores core U.S. sanctions, under U.S. law he must wait at least 180 days before imposing their furthest-reaching measure, which is to target banks of nations that fail to significantly cut their purchases of Iranian oil.