U.S. oil touches $75 amid fears Iran will block Middle East shipments

"We are prepared to work with countries that are reducing their imports on a case-by-case basis, but as with our other sanctions, we are not looking to grant wavers or licenses", Hook said when asked about India and Turkey which import Iranian oil.

On Tuesday, Morgan Stanley raised its Brent forecast to US$85 per barrel, from US$77.5, citing concerns that the United States may succeed in blocking much of Iran's 2.7 million barrels per day. The U.S. president and the Saudi King spoke on Friday, according to the White House.

Iran had been pushing hard for oil producers to hold output steady as USA sanctions are expected to hit its exports.

Iran shipped out over 2 million barrels per day of oil a year ago, with Asia taking almost three quarter of the supply and the remainder heading to Europe.

President TrumpDonald John TrumpScaramucci warns Trump must "change tactics now" on trade Trump sought to purchase historic Scottish building for hotel: report Republican wins right to replace Farenthold in Congress MORE said Sunday that the USA will "absolutely" sanction European companies that do business with Iran.

Turkey has also said it would keep up Iranian crude imports, while China, the largest consumer of Iranian crude oil, has criticised the United States for withdrawing from the deal.

Oil prices fell on Monday, reversing course from last week as supplies from Saudi Arabia and Russian Federation rose while economic growth stumbled in Asia amid escalating trade disputes with the United States.

USA crude futures CLc1 were up 19 cents at $74.33 a barrel, within sight of Tuesday's 3-1/2-year high above $75 a barrel.

And he confirmed that U.S. secondary sanctions on firms dealing with Iran would "snap back" on August 6 for trade in cars and metals and on November 4 for oil and banking transactions.

Apart from Iran, Venezuela, Libya and Angola are also facing chronic production issues. Analyst expectations were for a draw of 1 million barrels.

Matthew Smith, the director of commodity research at ClipperData, told UPI that oil prices so far this week are moving on one hand on OPEC pledges of more production, but correcting later on fears of supply-side strains. "If production increases as we now forecast, a large share of this would be eroded, leaving the global oil market with a limited "margin of safety", said Morgan Stanley's Rat. "We are also working with oil market participants, including producers and consumers, to ensure market stability".

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