Ejiofor Alike with agency reports
Barely a few days after crude oil price surged towards $80 per barrel, following the shut down of one oilfield in Norway and Libya reduced production by more than a half, the price slipped on Monday to $73 per barrel as Libyan ports reopened, while traders eyed potential supply increases by Russia and other oil producers.
The disruptions of crude oil production in Libya and Norway had added to the supply worries around the world.
Venezuelaâ€™s production had collapsed as a result of a lack of investment, while Iranian exports suffered due to United States sanctions.
US President, Donald Trump, said in May that he would remove his country out of an international accord under which Tehran had agreed to limit its nuclear development in exchange for sanctions relief.
Trump said he would reintroduce sanctions and Washington later told countries they must stop buying Iranâ€™s oil from November 4 or face financial consequences.
The Organisation of Petroleum Exporting Countries (OPEC) has little capacity to fill the gap as demand for oil quickens.
But despite the tight supply, the global benchmark crude, Brent fell $1.69 to a low of $73.64 per barrel, before recovering a little to trade around $73.80, down $1.53.
Also the USâ€™ West Texas Intermediate (WTI) light crude was down $1.15 at $69.86 per barrel.
Indeed, supply outages in Libya, a labour dispute in Norway and unrest in Iraq all helped push oil prices higher late last week, although prices still fell for a second straight week.
Saudi Arabia, other members of the OPEC and allies, including Russia agreed last month to increase output to dampen price gains and offset global production losses.
The market has grown concerned that if Saudi Arabia offsets the losses from Iran that will use up global spare capacity and leave markets more vulnerable to further or unexpected production declines.
Russia and other oil producers could raise output by one million barrels per day (bpd) or more if shortages hit the market, Russian Energy Minister, Alexander Novak, told reporters last Friday.
â€œIf we need more than one million bpd, I donâ€™t rule out that we can quickly discuss it and make a quick decision,â€ he said.
Production at Libyaâ€™s giant Sharara oilfield was expected to fall by at least 160,000 barrels per day (bpd) after two staff were abducted in an attack by an unknown group, the National Oil Corporation said last Saturday.
A Norwegian union for workers on offshore oil and gas drilling rigs stepped up a six-day strike yesterday that has hit oil output.
Reuters also reported that in Iraq, two protesters died on Sunday in clashes with security forces in the town of Samawa amid anger in southern cities over public services and corruption.
Demonstrations have not yet affected crude production in Basra, whose shipments account for more than 95 per cent of OPEC producer Iraqâ€™s state revenue.
But any disruption could severely impact the countryâ€™s economy and push up prices.
Investors are also on edge over the impact of the trade dispute between US and its big trading partners.
Trump and Russian President Vladimir Putin were set to hold their first stand-alone meeting in Helsinki yesterday.
Trump has been vocal about his dissatisfaction with higher oil prices, asking OPEC to lower prices.