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By Henning Gloystein
SINGAPORE - Oil prices dipped on Friday on expectations that producer club OPEC will soon raise output to make up for a decline in exports from Iran following a tightening of sanctions by the United States against Tehran.
Brent crude futures were at $74.09 per barrel at 0029 GMT, down 26 cents, or 0.4 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $64.82 per barrel, down 39 cents, or 0.6 percent, from their previous settlement.
The dip followed Brent's rise above $75 per barrel for the first time this year on Thursday after Germany, Poland and Slovakia suspended imports of Russian oil via a major pipeline, citing poor quality. The move cut parts of Europe off from a major supply route.
But prices were already gaining before the Russian disruption, driven up by supply cuts led by the Middle East dominated Organisation of the Petroleum Exporting Countries (OPEC) and U.S. sanctions against Venezuela and Iran. Crude futures are up around 40 percent so far this year.
Washington said on Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action from Washington.
To make up for the shortfall from Iran, the United States is pressuring OPEC's de-facto leader Saudi Arabia to end its voluntary supply restraint.
"The U.S. will continue to pressure Saudi Arabia to lift its production to cover the supply gap," said Alfonso Esparza, senior market analyst at futures brokerage OANDA.
Energy consultancy FGE said "the need is now very apparent for OPEC+ to take action and increase production" in order to keep markets well supplied and prevent prices from spiking.
Despite U.S. efforts to drive Iranian oil exports down to zero, many analysts expect some oil to still seep out of the country.
"A total of 400,000 to 500,000 barrels per day of crude and condensate will continue to be exported," said FGE, down from around 1 million bpd currently.
Most of this oil would be smuggled out of Iran or go to China despite the sanctions.
China, the world's biggest buyer of Iranian oil, this week formally complained to the United States over its unilateral Iran sanctions.
(Reporting by Henning Gloystein; editing by Richard Pullin)