Oil Prices Dip Ahead of OPEC+ Meeting Amid Iran Sanctions and U.S. Policy Risks

Oil prices slipped slightly in Asian trading on Friday as investors awaited signals from the upcoming OPEC+ meeting, while new U.S. sanctions on Iran helped limit losses.

Brent crude futures for September fell 0.2% to $68.66 a barrel, and West Texas Intermediate (WTI) dropped 0.2% to $65.51. Despite modest weekly gains of 1% to 2%, both benchmarks remain down double digits from the previous week’s selloff.

A stronger U.S. dollar, driven by robust nonfarm payrolls data, weighed on oil. The report dampened expectations for imminent interest rate cuts, pressuring dollar-denominated commodities like crude. Market sentiment also remains fragile due to mounting concerns over U.S. fiscal stability following the passage of a major tax and spending bill and looming trade tariff deadlines.

Attention is centered on the OPEC+ meeting this weekend. Reports suggest the alliance plans to raise output by 411,000 barrels per day in August, continuing a trend of phased production hikes. These increases aim to unwind deep supply cuts made over the past two years, as oil prices remain below key thresholds. Led by Saudi Arabia, OPEC+ also seeks to enforce compliance and address internal overproduction.

The U.S. also tightened sanctions on Iran, targeting a network smuggling Iranian oil disguised as Iraqi crude. The sanctions hit entities linked to Iraqi-British national Salim Ahmed Said, as part of efforts to curb Tehran’s oil revenues and nuclear ambitions.

Tensions between the U.S. and Iran remain high, following U.S. strikes on key uranium sites and Iran’s suspension of cooperation with the U.N. nuclear watchdog. Nonetheless, both sides are expected to resume nuclear talks in Oslo next week.

Overall, oil markets remain volatile, influenced by geopolitical risks, production policy, and macroeconomic uncertainty.