The market was also bolstered by a report on Tuesday from the American Petroleum Institute, which said crude inventories fell by 6 million barrels in the week to August 3 to 407.2 million.
"Gasoline demand has been one of the main bullish stories in the oil market and if that demand is slipping off a little bit, maybe we're seeing reluctance to higher prices", says Phil Flynn of Price Futures Group. A weak dollar can lift the price of commodities, like oil, that are priced using the currency.
Brent prices fell 6.5 percent in July, their steepest monthly drop since July 2016.
The sanctions are already brewing a potential confrontation between the USA and Iran as Tehran has threatened to block the Strait of Hormuz, an important sea route through which tankers ship more than 30 per cent of crude oil to the global market, in retaliation to the sanctions.
The Guardian of the United Kingdom reported that the commander of Iran's elite Revolutionary Guards, whose forces patrol the Strait of Hormuz, had stated that the guards were ready to put Rouhani's words into action if necessary.More news: Johnny Depp's Notorious BIG Movie Pulled A Month From Release
Other sanctions, including those targeting Iranian crude, will resume in November. The sanctions, which would come into force from November 4, are likely to block current payment routes used to pay for Iranian imports.
An Iranian newspaper reported that Foreign Minister Mohammad Javad Zarif said a US plan to reduce Iran's oil exports to zero will not succeed.
But a senior official at Iran's economy ministry said Tehran did not think the economic impact of the sanctions would be massive.
The White House said in a statement Monday that the United States will reactivate a slew of sanctions on Iran's financial and industrial sectors beginning on Tuesday.
Analysts have predicted the sanctions could put more than two million barrels per day at risk.
India's imports from Iran could start to slow from August as some big Indian refiners worry that their access to the USA financial system could be cut off if they continue to import Iranian oil, prompting them to reduce oil purchases from Tehran. This article is strictly for informational purposes only. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.