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SINGAPORE/TOKYO Oil prices edged up on Friday on news that U.S. President Donald Trump could be set to impose new sanctions on multiple Iranian entities, raising geopolitical tensions between the two nations.

Comments by Russian energy minister Alexander Novak that oil producers had cut their output in accordance with a pact agreed in December also helped support prices, analysts said.

Reuters reported on Thursday that Trump's administration is prepared to roll out new measures against more than two dozen Iranian targets following Tehran's ballistic missile test, according to sources familiar with the matter.

Brent crude futures had risen 45 cents, or 0.8 percent, to $57.01 a barrel by 0750 GMT (02:50 a.m. ET), after settling down 24 cents at $56.56 in the previous session. Brent is set to gain 2.6 percent for the week.

Front month U.S. West Texas Intermediate crude futures climbed 48 cents, or 0.9 percent, to $54.02 a barrel, after ending Thursday down 34 cents. For the week, the contract is up a little over 1 percent.

Moves by the U.S. to impose new sanctions on Iran is "something at the back of short-term traders' minds," said Ric Spooner, chief market analyst at Sydney's CMC Markets.

"It's on the risk radar more than it otherwise might have been," he said.

The sources, who had knowledge of the administration's plans, said the package of sanctions was formulated in a way that would not violate the 2015 Iran nuclear deal.

Supply concerns were also raised when Russia's energy minister said global oil output was cut by 1.4 million barrels per day (bpd) last month as part of the deal last year between OPEC and other producers.

"Oil markets have been supported by OPEC and as long as things hold people will look for evidence output curbs have chiseled away at inventories," Spooner said.

Novak also said Russian companies may cut oil production quicker than had been initially agreed with OPEC and that he expected the market to rebalance by the middle of this year.

Oil prices have stabilized about 15 percent higher than they were before OPEC and non-OPEC producers agreed in December to curb output, National Australia Bank said in a note on Friday.

"We now expect oil prices to average around the mid to high $50s in Q1 and Q2, before reaching the low $60s by end-2017 and stabilizing at around those levels in 2018," the bank said.

Brent prices could also come under pressure due to refinery maintenance in Europe and Asia in the first half of this year creating a situation where crude exports remain high while crude demand weakens, energy consultancy BMI Research said in a report on Friday.

(Reporting by Osamu Tsukimori and Keith Wallis; Editing by Tom Hogue and Christian Schmollinger)

HOUSTON/CALGARY Canadian and European oil companies will find themselves at a competitive disadvantage to their American rivals if U.S. lawmakers scrap tighter transparency requirements on the industry, as expected, according to company executives, legal experts and trade groups.

CHICAGO Soybean shippers in the United States - the worlds leading supplier between September and March - have been extremely busy pushing out record volumes of the oilseed overseas.

LONDON Last year zinc was the star performer among the major base metals traded on the London Metal Exchange (LME).

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Oil edges up on threat of US issuing new Iran sanctions - Reuters

Yemenis search under the rubble of damaged houses following reported Saudi-led coalition airstrikes on the outskirts of Sanaa, Yemen, on Wednesday. MOHAMMED HUWAIS / AFP - Getty Images

Michael Stephens, a research fellow for Middle East studies at the Royal United Services Institute think tank, cautioned against over-emphasizing Iran's role in Yemen in the way the Saudis have traditionally done.

He said that while a "proxy battle" is an aspect of it of the war Saudis see their military involvement as a way to stop Iran from exploiting instability in their poorer neighbor "if you look at Yemen on the list of Iranian priorities it is really low."

During the campaign, Trump stuck to a hardline approach on Iran, and called the 2015 multinational plan to lift economic sanctions in exchange for Tehran's promise not to develop nuclear weapons "the worst deal ever negotiated."

Trump also included Iran on a

On Wednesday, Flynn underlined Trump's disapproval of the President Barack Obama agreements with Iran as "weak and ineffective."

He delivered his remarks in a surprise appearance at the daily White House press briefing. In addition to the ballistic missile tests, Flynn cited other examples of what he called Iran's "destabilizing behavior across the Middle East" a likely reference to its influence in Syria, Iraq and with Hezbollah militants in Lebanon.

U.N. resolutions currently do not prohibit Tehran from conducting such missile tests but

The Trump White House has not accused Tehran of breaching that resolution, but alleges it is acting "in defiance" of it.

Flynn suggested that the new administration would take a harder line on Iran in the wake of the missile test.

"Instead of being thankful to the United States for these agreements, Iran is now feeling emboldened," Flynn said, an apparent reference to the 2015 nuclear deal with Iran.

While it isn't clear what exactly this means, the new administration's pronouncement represents a sharp escalation in the rhetoric coming out of Washington.

If the desired effect was to get Iran to back down, the White House failed at least in the short term.

"Iran will continue to test its capabilities in ballistic missiles and Iran will not ask any country for permission in defending itself,"

But RUSI's Stephens pointed out that Iran's involvement in Lebanon, Syria and Iraq is much deeper than in Yemen.

"The concrete is drying pretty quickly on Iran's footprint across the region," he added.

A guard sits on the rubble of the house of Brig. Fouad al-Emad, an army commander loyal to the Houthis, after airstrikes destroyed it in Sanaa, Yemen, on June 15, 2015. Khaled Abdullah / Reuters

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Analysis: Trump Turns Attention to Yemen, but Is Looking at Iran - NBCNews.com

Tension between the Trump administration and Iran continued to rise Wednesday when National Security Adviser Michael Flynn said the White House was putting Tehran "on notice," an apparent threat of retaliation for a recent ballistic missile test.

Flynn said in a statement that the launch defied a U.N. Security Council resolution aimed at keeping Iran from developing nuclear-armed missiles.

Related: Iran Test-Fires Medium Range Ballistic Missile: U.S. Officials

Flynn, a retired Army general and former head of the Defense Intelligence Agency, delivered his remarks in a surprise appearance at the daily White House press briefing. He cited other examples of what he called Iran's "destabilizing behavior across the Middle East," including reported attacks on U.S. allies by Iran-backed Houthi rebels.

He pointed out President Trump's disapproval of a multinational agreement with Iran that lifts economic sanctions in exchange for a promise not to develop nuclear weapons.

"Instead of being thankful to the United States for these agreements, Iran is now feeling emboldened," Flynn said. "As of today, we are officially putting Iran on notice."

What exactly that means is unclear.

Flynn did not take questions after delivering his warning. White House spokesman Sean Spicer declined to elaborate in an afternoon press briefing.

It could mean the Trump administration is seeking ways to undo the nuclear deal.

Last week, Trump included Iran on a list of seven majority-Muslim countries whose citizens would be temporarily banned from entering the United States.

Iran used to be prohibited from test-firing ballistic missiles under previous U.N. resolutions. However, these were superseded by a new resolution passed alongside the nuclear deal.

This only "called upon" Iran not to test-fire missiles that could be used to deliver nuclear weapons. Critics of the deal say this wording is effectively a loophole meaning the missile-testing restrictions are not obligatory.

The government in Tehran says that because it doesn't have a nuclear-weapons program, its missile tests are not violations of this clause.

Iranian Foreign Minister Javad Zarif didn't confirm or deny the launch during a press conference Tuesday but said, "The missiles aren't part of the nuclear accords," Reuters reported. "Iran will never use missiles produced in Iran to attack any other country."

Flynn's remarks Wednesday followed assertions Tuesday by Nikki Haley, the U.S. ambassador to the United Nations, that the Trump administration would not "show a blind eye" to Iran's actions.

"We're gonna act, we're gonna be strong, we're gonna be loud and we're gonna do whatever it takes to protect the American people and the people across the world, because that's what the goal is supposed to be," she said.

Israeli Prime Minister Benjamin Netanyahu said in a statement that he planned to press Trump to renew sanctions against Iran and "take care of this failed nuclear agreement."

He added, "Iran's aggression must not go unanswered."

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White House Puts Iran 'On Notice' for Missile Test - NBCNews.com

By Dan Sullivan By Dan Sullivan February 1 at 2:36 PM

Dan Sullivan, a Republican, represents Alaska in the Senate.

As a candidate, Donald Trump said he would tear up the Iran nuclear deal once elected. Many of us in the Senate strongly opposed this deal on substance it provides the worlds largest state sponsor of terrorism a pathway toward to nuclear weapons inside of a decade and also on process. The Obama administration sought the approval of the U.N. Security Council, but essentially ignored the constitutional role of the Senate in seeking to finalize the deal as an executive agreement, not a treaty. As a result, President Trump would be within his rights and authority to undo the deal through executive action, particularly as Iran continued to show that it has no intention of abiding by the deal by launching yet another ballistic missile on Sunday.

But there is a potentially better alternative than unilaterally disavowing the deal: Let it fail on its own by vigorously enforcing it.

Since the enactment in 2015 of the Joint Comprehensive Plan of Action (JCPOA), the United States, China, France, Russia, Britain and Germany, known as the P5+1, have, for their own political and economic reasons, studiously looked the other way as at least four key provisions of the deal have been violated.

First, Annex 1 of the JCPOA limits Irans stock of heavy water a catalyst for nuclear weapons. According to the International Atomic Energy Agency, there are at least two instances of Iran knowingly exceeding its heavy water limit in February and November of last year. Instead of holding Iran to account for the violations, the Obama administration bought up the illicit material for $8.6 million.

Second, Annex B of U.N Security Council Resolution 2231 which serves as the implementing resolution for the JCPOA and its legal framework calls on Iran not to undertake any activity related to ballistic missiles for eight years. However, Iran has conducted five ballistic missile tests since the deal was finalized.

Third, Annex B of the implementing resolution also bans certain individuals from travel to foreign countries. Yet nothing was done when it was discovered that Irans Quds Force commander, Qasem Soleimani, who is on that list, traveled to Russia to meet with President Vladimir Putin after the deal was signed. As recently as December, Soleimani was seen visiting Aleppo.

Finally, Annex B also states that the Security Council must approve services, advice, other services or assistance, related to the sale of conventional weapons. Its been widely reported that Russia is in talks to sell Iran $10 billion worth of conventional weapons, including advanced tanks, artillery systems, planes and helicopters. Iran has not asked for such approval.

No member of the P5+1 has done anything about these violations. Russia is complicit in them; China needs Irans oil and gas; Europe wants business deals; and the Obama administration didnt want to undermine what it saw as a major foreign policy legacy.

But Trumps interest is in protecting Americans and our allies in the Middle East. And that could be done by stating that the United States will abide by the terms of the deal, while also making clear that those terms are already being systematically violated. He could give all the parties to the agreement 60 days to remedy the situation. If they fail to do so, he should take the next step, pursuant to the agreement: reapply sanctions against Iran.

The conventional wisdom, as spun by the Obama administration officials who negotiated this ill-advised deal, is that only a re-imposition of sanctions by the entire international community would be effective against Iran. But, as so often was the case in 2016, the conventional wisdom is wrong. Even unilateral U.S. sanctions could be significantly destabilizing to the Iranian regime and its economy.

Ive seen this work first hand. As an assistant secretary of state in charge of economics, energy, terrorist finance and sanctions during President George W. Bushs second term, I served with other senior members of the State and Treasury departments to encourage allies and businesses around the world to quit doing business with Iran or risk secondary sanctions from the U.S. Congress.

Working with Congress, both the Bush and Obama administrations were able to impose sanctions that targeted states and individuals who conduct business with Irans central bank. We also were able to ensure significant restriction of Iranian access to the U.S. financial system, including those that are conducted in dollars, which need to be cleared through a U.S. financial institution, even if the money isnt staying in the United States. We also encouraged countries and companies to divest from the Iranian oil and gas sector.

Many of our allies only reluctantly agreed to economically isolate Iran, largely due to this pressure.

Even acting unilaterally, we still have leverage to put pressure on Iran and the international community to yield results. Our power over the international financial system remains, and with regard to energy, U.S. leverage has increased dramatically. The United States is once again the worlds energy superpower. As such, we could give countries and companies a choice: Invest in Irans oil and gas sector or invest in Americas. I believe that most companies would choose the United States.

With strong, principled U.S. leadership, others countries will follow. If they dont, the Trump administration will be able to say that the United States abided by the spirit and letter of the agreement, and it was the other members of the P5+1 who chose to turn a blind eye to Irans violations and walk away from the deal.

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Don't 'tear up' the Iran deal. Let it fail on its own. - Washington Post

The Trump administration said Wednesday it was officially putting Iran on notice that it is paying attention to what it called defiance of nuclear agreements with its test launch of a ballistic missile.

The launch, along with Tuesdays attack by Houthi rebels on a Saudi warship off the coast of Yemen, underscore what should have been clear to the international community all along about Irans destabilizing behavior across the Middle East, said Michael T. Flynn, President Trumps national security adviser.

Flynn read the Iran statement at the regular White House press briefing and did not take questions.

In his first media appearance since the inauguration, Flynn recalled that Trump during his campaign criticized the nuclear deal negotiated by the Obama administration with world powers, Iran and the United Nations as being weak and ineffective.

Instead of being thankful to the United States for these agreements, he said, Iran now feels emboldened. The brief statement, calling the missile launch provocative, did not outline any actions the administration intends to take.

Irans launch Sunday of a medium-range Khorramshahr missile ended in failure, with the missile reportedly traveling about 600 miles before exploding in the air.

The United States called for an emergency meeting of the U.N. Security Council. Following the Tuesday session, Nikki Haley, the new U.S. ambassador to the United Nations, said the world should be alarmed by the test and called for unspecified U.N. action.

In a Tehran news conference Tuesday, Iranian Foreign Minister Mohammad Javad Zarif did not confirm the launch but said that the missile issue is not part of the nuclear deal. Iranian missiles are not designed for the capability of carrying a nuclear warhead, he said. Our ballistic missile was designed to carry a normal warhead in the field of legitimate defense.

The agreement, which took effect a year ago, prohibits development of ballistic missiles as part of a nuclear weapons program that the accord was designed to prevent. Differences of opinion on whether the launch is a violation of the agreement rest on interpretation of the strength of the nuclear deal and of Irans intentions.

Although a number of Republican presidential primary candidates, and some members of Congress, have called for tearing up the agreement, Trump has not taken that position. He has called it a bad deal and said his administration would review it to determine whether it should be renegotiated.

U.S. partners in the negotiations, including Britain, France, Germany, China and Russia, have warned against a renegotiation of the deal, under which severe restrictions on a nuclear program Iran insisted was solely for energy production were put in place in exchange for the lifting of nuclear-related U.S. and international sanctions.

Flynn also referenced the Saudi warship that was attacked Tuesday by Houthi rebels in Yemen. A rebel suicide boat exploded after striking the ship, which was patrolling off the Yemeni coast. Two Saudi sailors were killed.

Saudi Arabia is fighting Yemeni rebels from the Houthi tribe who have taken over broad swaths of the neighboring country. Its actions include offshore naval patrols to intercept what it has said are Iranian arms supplies to the rebels.

Read more here:
Trump administration says it's putting Iran 'on notice' following missile test - Washington Post