Mubasher: Oil prices declined on Tuesday after Saudi Arabia, the Organization of Petroleum Exporting Countries’ (OPEC) kingpin nation, pledged to play a “responsible role” in markets.

This came despite persisting anxieties in the run-up to US sanctions against Iran’s crude shipments which would take effect next month.

By 7:45 am GMT, US Nymex crude futures went down 0.43% to $69.06 per barrel (pb), while global benchmark Brent futures fell 0.59% to $79.36 pb.

Major oil producer Saudi Arabia promised to keep markets sufficiently supplied in the wake of the death of Saudi journalist Jamal Khashoggi, and amid signs that supplies are increasing from the Middle East.

Meanwhile, US sanctions against Iran’s oil exports would come into effect as of 4 November, as the White House is exerting pressure on countries and companies to cut their purchases of Iranian shipments to zero.

South Korea’s crude purchases from Iran dropped to zero last September year-on-year, Korea National Oil Corp (KNOC) said.

Traders were worried that Saudi Arabia could slash crude supplies in retaliation to potential US sanctions against Riyadh over Khashoggi’s murder, at the same time when markets would tighten with sanctions against Tehran start to bite.

However, Saudi Energy Minister Khalid al-Falih attempted to mollify such fears, saying that “there is no intention” for such move, and Riyadh would play a “constructive and responsible role” in global energy markets.

If Saudi Arabia scaled back supplies, it “would [...] risk losing market share to other exporters while losing its reputation as a stable actor in the market,” Singapore-based Economist Intelligence Unit’s lead energy analyst Peter Kiernan told Thomson Reuters.

On the other hand, “markets are [...] wary of the impact of US  sanctions on Iran’s oil sector,” while the embargoes are estimated to remove 1.5 million barrels per day (bpd), energy consultancy Trifecta director Sukrit Vijayakar told the news agency.

US bank JPMorgan raised its price forecast for Brent by $20.50 to $83.50, saying that the bullish projection “is strongly driven by tighter supply due to Iranian sanctions and declining spare capacity.”

At the other end of the spectrum, shipping brokerage Eastport projected prices to fall in the next months, as higher production in the US makes up for rising global demand.

US crude output jumped by around a third since mid-2016 to a total of 11 million bpd, while rising oil rig count indicated further increases.