US President Donald Trump last month pulled out of an worldwide nuclear deal with Iran, announcing the "highest level" of sanctions against the OPEC member.
Crude oil futures ticked higher Wednesday in Europe, with the market focusing on the longer term picture of tighter OPEC supply rather than the bearish inventory builds announced by the US Energy Information Administration this week.
Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), is almost a month behind in shipping crude to customers from its main oil export port, according to Reuters data, as chronic delays threaten to breach state-run PDVSA's crude supply contracts if they are not quickly cleared.
Oil prices could jump to $140 a barrel due to the USA sanctions against Iran and Venezuela, Iran's OPEC governor Hossein Kazempour Ardebili told Reuters on Friday.
OPEC, and Saudi Arabia specifically, have assured in recent weeks that they would address "consumer and market anxiety" if need be, as gasoline prices around the world reached their highest in four years.More news: United States servicemember killed, 4 others wounded in attack in Somalia
Before it slapped penalties on Iran, the US unofficially asked Saudi Arabia and other OPEC producers to increase oil production to try to curb price increases, Reuters reported.
Oil prices fell on Wednesday on worries that global supply is climbing after USA inventories rose unexpectedly and Saudi Arabia and other big producers signalled that they may increase output. Production in 2016 totaled 75.48 million barrels a day. The top three producers previous year were Russian Federation with daily production of 10.35 million barrels, Saudi Arabia with 9.96 million barrels and the United States with 9.36 million barrels. That compared with 9.6 million bpd in April.
The U.S. request was widely known among industry weatchers.
OPEC meets to determine future production on June 22, 2018.
Crude oil prices moved lower and are trading sideways forming a bear flag pattern which is a pause that refreshes lower. Crude prices will be volatile until the meeting and any announcement regarding future production.
But US oil had rebounded by Tuesday's close amid expectations US crude oil stockpiles likely fell for a second week last week.