The United States has started implementing new sanctions against Iran, which from November would also target the country's petroleum sector.
The International Energy Agency (IEA), in its monthly report published Friday, confirmed that Iran's output continued to fall last month, reaffirming expectations that Washington's tough stance on sanctions against Tehran were starting to curb demand for crude from the Islamic Republic.
Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC).
Meanwhile, US output, which had surged to a record last month, has slowed in recent weeks, while the number of oil rigs rose to the highest in more than three years. "But the complicating factor right now is Iran and the sanctions", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
"While there has been minimal impact so far on Iran's crude production ahead of renewed USA sanctions, Washington's move to apply the toughest ever measures on Iran could result in an even steeper reduction than ... seen during the previous round of sanctions" when its exports fell by 1.2 million barrels per day (mbd) said the IEA.
But then Trump's displeasure with high oil prices and influence over Saudi Arabia has led to augmented production levels. Total volume traded was about 14 percent below the 100-day average.
Front-month Brent crude oil futures were at $72.57 per barrel at 0702 GMT, down 24 cents, or 0.3 percent, from their last close. Platts cFlow trade-flow software shows an increase in exports for the week ending August 10, with a big jump in crude to Canada balancing a drop off in crude exports to Asia.
"Anyone trying to take away Iran's oil market (share) would be committing great treachery against Iran and will one day pay for it", Jahangiri warned in an open reference to Saudi Arabia.
Global oil supply rose by 300,000 barrels per day (Bpd) in July, to 99.4 Mmbpd - 1.1 Mmbpd more than past year, Kallanish Energy learns.
USA energy companies last week increased their number of active oil rigs by the most since May, adding 10 rigs to bring the total count to 869, according to the Baker Hughes energy services firm. Asian shares slid, USA equity futures dropped, and Treasuries and the yen advanced after the lira's sell-off spread to other emerging market currencies.