Oil prices had been edging higher prior to the announcement.
Investor concern that the trade spat will limit energy demand growth overshadowed Energy Information Administration data released Wednesday that showed United States crude inventories fell the second time in three weeks.
Gasoline stocks rose by 2.9 million barrels, compared with expectations for a drop of 1.7 million-barrel drop, as forecast in a Reuters poll. "The reality is that in August, we do start to see a wind down in gas consumption, and petroleum in general, is seasonally weak".
Today, the bulls jumped in after President Donald Trump tweeted that the sanctions were "the most biting sanctions ever imposed".
"Of course, such decisions being taken by the USA side are absolutely unfriendly and can hardly be associated with the. constructive atmosphere achieved at the latest meeting of the two presidents", he was quoted by Russian news agency Tass as saying.More news: Bayelsa DSS director appointed acting DG
Front-month Brent crude oil futures were at $74.85 a barrel at 9.51am GMT, up 20c, or 0.25%, from their last close. German carmaker Daimler AG froze a plan to make Mercedes Benz trucks in Iran, while Total SA said it couldn't risk investing in Iran because of its large USA operations.
The first round of renewed United States sanctions will take effect on Tuesday with the harshest sanctions, potentially targeting Iran's oil industry, expected to return in early November. The agency had previously expected crude output to average more than 12 million bpd by the fourth quarter of 2019, but revised that quarterly average downward to 11.94 million bpd.
Exports to Asia fell to 1.76 million b/d in July from 1.85 million b/d in June as demand from South Korea and Taiwan dissipated as the former turned to other countries for condensates.
The concerns over possible supply disruptions in Iran come at a time when analysts warn that a global heatwave could increase oil demand.
Indian Oil agreed to buy 6 million barrels of USA crude through the term-tender, taking its American crude purchases to 16 million barrels in total since April.More news: Angelina Jolie Wants Divorce From Brad Pitt Expedited
"The U.S. -China trade war is set to worsen, and its impact on oil prices will be gradual as the situation develops", said Abhishek Kumar, senior energy analyst at Interfax Energy in London. The crude oil prices' down trend through July 2018 was attributed to several factors that negatively affected the prices, including the production hikes in Saudi Arabia and Russian after the meeting of the Organisation of the Petroleum Exporting Countries (Opec) with non-member producers in June, which resulted in a decision to gradually ease the group's production in order to balance the supply and demand of global crude oil.
"If we get below $66 here, you're arguably violating the long-term uptrend channel", he said, referring to USA crude's upward trajectory this year.
Some sources have said with exports falling, Iran's domestic refinery runs have increased, with a pick-up in gasoline output observed at some of its refineries, and more barrels are expected to go onto floating storage.
China is the biggest and the most valued customer for Iran's oil and imports more than 650,000 barrels of oil per day from Iran.More news: McGregor and Nurmagomedov agreed to battle known date
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