Trump on Tuesday announced that the U.S. was withdrawing from the Iran nuclear deal signed by the Obama administration in 2015 under which Tehran had agreed to limit its sensitive nuclear activities and allow in worldwide inspectors in return for the lifting of crippling economic sanctions. Today, the U.S. Energy Information Administration (EIA) supply data will be released, with expectations of a draw of 0.719m barrels.
Brent crude futures are hovering around $77 a barrel, having risen by around 10 percent in the last six weeks as US rhetoric around Iran grew increasingly hawkish.
Outside OPEC, soaring United States crude oil production C-OUT-T-EIA may also help fill Iran's supply gap, hitting another record last week by climbing to 10.7 million barrels per day (bpd).
The EIA report helped lift U.S. gasoline futures to $2.1674 a gallon, the highest since Hurricane Harvey sent prices surging in August.
US oil major ConocoPhillips moved to take Caribbean assets of Venezuela's state-run PDVSA to enforce a $2 billion arbitration award. With Germany, France and Britain saying they are committed to the accord, the European countries will "continue importing oil from Iran, albeit having to side-step the US banking system for trade purposes", it said.
Shares in oil majors Total (TOTF.PA), Royal Dutch Shell (RDSa.L) and Eni (ENI.MI) were all trading up between 1.1 and 2.3 percent.
THE world's major powers were nearly unanimous in their condemnation of Donald Trump's scrapping of USA support for the Iran nuclear deal.
France, Britain and Germany have all said they will work with Iran to try to salvage the agreement.
The threat of new sanctions comes amid an oil market that has already been tightening due to strong demand, especially in Asia, and as top exporter Saudi Arabia and No.1 producer Russian Federation have led efforts since 2017 to withhold oil supplies to prop up prices.
All key crude oil futures contracts saw traded volumes jump as speculators took on new positions in the hope of profiting from rising prices, and as refiners hedged to protect themselves from higher feedstock oil prices.
Tehran's regional rival Saudi Arabia quickly moved in to reassure the global oil market to compensate any shortage in supply on the account of lower oil sales by sanction-hit Iran.
He said he did not expect oil prices to rise sharply because he sees other countries boosting production.
"In short, the micro drivers of the oil market remain positive, as long as global demand does not suffer from the ongoing threats of trade wars and policy uncertainty", Blanch said.