These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level.
Brent crude futures LCOc1 rose 66 cents, or almost 1 percent, to $74.41 per barrel by 12:20 p.m. EDT and U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 27 cents at $69.28 a barrel.
"It certainly is a reminder to everyone that the U.S.is serious about sanctions, and it's doubtful they will grant waivers", said John Kilduff, partner at Again Capital Management in NY.
In other news, USA drillers cut two oil rigs in the week to August 3, bringing the total count down to 859, General Electric's Baker Hughes energy services firm said on Friday. However, Russia, the United States and the Saudi's are still producing 10 million to 11 million bpd of crude.
"The U.S. sanctions against Iran apply to the purchase of U.S. dollars and might therefore already impact Iranian oil exports", added Giovanni Staunovo, a commodity analyst for UBS.
USA sanctions on Iran's energy sector are set to be re-imposed after a 180-day "wind-down period" ending on November 4. U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 29 cents at $69.30 a barrel, down from am earlier high of $69.83.
French bank Societe Generale said that while there was now "comfortable supply in the physical crude markets".
"The US seems hell-bent on regime change in Iran", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Exports to China rose to 799,452 bpd in July from 722,100 bpd in June, while Iranian oil sales to India increased by more than 40,000 bpd from June to 706,452 bpd in July, S&P Global Platts data shows.
HEAT IMPACTS OIL The main oil market price drivers of recent months have been output levels by top producers Russia, Saudi Arabia and the United States, renewed Iran sanctions, the US-China trade dispute, and unplanned supply disruptions. Data from the American Petroleum Institute for US inventories is due later on Tuesday at 4:30 p.m. EDT, followed by the government's report on Wednesday morning.
The concerns over possible supply disruptions in Iran come at a time when analysts warn that a global heatwave could increase oil demand.
Additionally, there are also reports that many US shale oil drillers posted disappointing quarterly results in recent weeks, hit by rising operating costs, hedging losses and a drop in crude prices away from 2018 highs reached between May and July.
This mostly affects demand for power fuels such as thermal coal and natural gas.
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