Oil eases as clock ticks down to Trump decision on Iran

By Amanda Cooper

LONDON (Reuters) - Oil eased on Tuesday ahead of an announcement by U.S. President Donald Trump later in the day on whether the United States will reimpose sanctions on Iran, but the price held within sight of its highest in more than three years.

Should Trump pull the United States out of a multi-nation agreement on Tehran's nuclear programme, 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 51 cents at $75.66 a barrel by 1358 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 81 cents to $69.92.

Trump on Monday said that a decision on whether to remain in the Iran nuclear deal or to impose sanctions would be announced at 2 p.m. EDT (1800 GMT) on Tuesday, four days earlier than expected.

"To a large part, it is mostly priced in. It's something we've been focusing on for a couple of months now and today is decision day," Petromatrix analyst Olivier Jakob said.

"There has already been a lot of positioning for the outcome and the outcome that most expect is that he will not renew the (sanctions) waivers."

Trump is likely to either announce he will not be renewing a waiver on sanctions or will restate his opposition to the nuclear agreement, Barclays Research analysts said in a report.

"The geopolitical consequences of a possible dismantling of the (Iran deal) would likely 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 make significant cuts to their purchases of Iranian oil.

"In our view, the resumption of sanctions would drive a short-term increase in benchmarks, potentially towards $80 a barrel, depending on the scope and timing," said Jack Allardyce, Cantor Fitzgerland oil and gas research analyst.

Under the deal to limit Iran's nuclear programme, formally known as the Joint Comprehensive Plan of Action, the United States agreed to ease a series of sanctions on Iran and has done so under a string of "waivers" that effectively suspend them.

(Additional reporting by Aaron Sheldrick in TOKYO; Editing by Louise Heavens and David Goodman)