Oil prices retreated from 3-1/2 year highs on Tuesday as investors waited on an announcement by President Donald Trump on whether the United States will reimpose sanctions on Iran.
Should Trump pull the United States out of a multi-nation agreement on Tehran's nuclear programme, Iranian crude exports could be hit, adding to tightness in the oil market, which is coming back into balance after years of glut.
U.S. West Texas Intermediate (WTI) crude futures had dropped 66 cents, or nearly 1 percent, to $70.07 a barrel by 9:04 a.m. ET (1304 GMT). They settled above $70 for the first time since November 2014 on Monday.
Brent crude futures were down 49 cents at $75.68, having jumped 1.7 percent to settle at $76.17 a barrel in the previous session.
Trump said on Monday that a decision on whether to remain in the Iran nuclear deal or to impose sanctions would be announced at 2:00 p.m. EDT (1800 GMT) on Tuesday, four days earlier than expected.
"Until we get more clarity on Trump's intentions, we are unlikely to get further upside on crude," said Virendra Chauhan, oil analyst at Energy Aspects in Singapore.
"If we assume he goes back to 2012 sanctions, we estimate a loss of 0.4 million barrels a day of Iranian supply based on recent Iranian export numbers.
Anything larger than this will be bullish," he added.
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.
"Regardless, his foreign policy continues to ignite tensions in the main oil-exporting centre and is, thus, price supportive," they 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 significantly cut their purchases of Iranian oil.
Under the deal to limit Iran's nuclear pogramme, formally known as the Joint Comprehensive Plan of Action, the U.S. agreed to ease a series of sanctions on Iran and has done so under a string of "waivers" that effectively suspend them.
Trump has repeatedly threatened to withdraw from the deal, unless France, Germany and Britain - which also signed the agreement - fix what he has called its flaws.