Oil steadies as Sverdrup field restart counters geopolitical concerns

NEW YORK: Oil prices steadied on Tuesday as Norway’s Johan Sverdrup oilfield restarted production while there were reports of Iran offering to cap its uranium stockpile, factors that offset investor concerns about escalation of the Russia-Ukraine war.

Brent crude futures fell 0.1%, or 5 cents, to $73.25 per barrel by 12:11 p.m. EST (1711 GMT). US West Texas Intermediate crude futures gained 0.1%, or 5 cents, to $69.21 per barrel.

Equinor resumed partial production from the Johan Sverdrup field in the North Sea, Western Europe’s largest oilfield, the day after a power outage there helped lift oil prices by over 3%.

“I guess the partial restart of the Sverdrup field is the driver of the setback, as well as a slightly stronger US dollar,” said Giovanni Staunovo, analyst at UBS.

The dollar edged up to within striking distance of its one-year high. A strong dollar makes commodities such as oil more expensive for other currency holders and tends to weigh on prices.

Oil prices also came under pressure after confidential reports by the UN nuclear watchdog, seen by Reuters, said Iran has offered to stop expanding its stock of uranium enriched to 60% purity, near the roughly 90% of weapons grade.

Oil prices drew some support from an ongoing outage at Kazakhstan’s biggest oilfield, Tengiz, which has reduced output by 28% to 30% for repairs which the country’s energy ministry has said will be completed by Saturday.

Rising tensions between Moscow and Washington over Ukraine also supported the oil market.

For the first time, Ukraine used US ATACMS missiles to strike Russian territory on Tuesday, Moscow said. Russian foreign minister Sergei Lavrov described the attack as a Western escalation. Russian President Vladimir Putin lowered the threshold for a possible nuclear strike.