Oil prices stable after Iran disruption concerns ease, Russian flow to India slows

By Shadia Nasralla

LONDON, Feb 9 (Reuters) - Oil prices were stable on Monday after the U.S. and Iran pledged to continue indirect talks, easing oil supply fears, but India stepping away from Russian oil purchases is giving prices a floor.

Retracing earlier losses, Brent crude oil futures LCOc1 were up 17 cents, or 0.3%, at $68.22 a barrel by 1044 GMT, while U.S. West Texas Intermediate crude CLc1 rose 18 cents, or 0.3 %, to $63.73.

Iran and the U.S. pledged to continue the talks following what both sides described as positive discussions. That eased the concern that a failure to reach a deal might nudge the Middle East closer to war, as the U.S. has positioned more military forces in the area.

About a fifth of the world's oil consumption passes through the Strait of Hormuz between Oman and Iran.

Brent and WTI fell more than 3% and 2%, respectively, last week, their first decline in seven weeks, as tensions eased and amid a broader market selloff led by equities.

However, the foreign minister of Iran said the country will strike U.S. bases in the Middle East if it is attacked by U.S. forces.

"The Iranian risk premium cannot be fully defused as long as U.S. warships are located where they are," said SEB analyst Bjarne Schieldrop.

Investors are also grappling with Western efforts to curb Russia's income from oil exports that support its war in Ukraine. The European Commission on Friday proposed a sweeping ban on any services that support Russia's seaborne crude oil exports.

Refiners in India, once the biggest buyer of Russia's seaborne crude, are avoiding purchases for delivery in April and are expected to stay away from such trades for longer, refining and trade sources said, which could help New Delhi seal a trade pact with Washington.

If India fully stopped Russian oil purchases "this would be a sustained bullish development for the physical crude market," said Sparta oil market analysts.