U.S. West Texas Intermediate (WTI) crude futures fell to a almost seven-week low during the session and were last trading down $2.63, or 3.8 percent, at $66.54. The catalyst behind the strength are expectations of tight supply despite OPEC increasing oil production to offset losses elsewhere.
Under the arrangement, Iran's oil payments were deposited into accounts in oil-importing countries and used by Tehran to buy goods.
Net long positions in Brent and WTI were cut from a peak of 1.093 billion barrels in mid-April to 790 million barrels by the end of the first week in June, and have changed relatively little since then.
Another reason for the uncertainty is the lack of 100% compliance with the US government.
Ahead of the return of the USA sanctions on Iran, India's state refiners boosted their Iranian oil purchases, pushing up Indian oil imports from Iran by 30 percent from June, to a record 768,000 bpd in July, according to preliminary tanker arrival data that Reuters has obtained from trade sources.
"It is our policy to get as many countries to zero as quickly as possible". Gasoline inventories increased by 3.1 million barrels and distillate stockpiles rose by about 1.8 million barrels.
Generally speaking, however, the increased production from the Saudis, Russian and USA leave the markets with a little spare capacity to deal with unforeseen disruptions. This will be the second time the U.S. slaps duties on Chinese products in about the past month, despite complaints by local companies that such moves will raise business costs and eventually consumer prices.
The Vienna conference on 23 June 2018 decided the oil-producing would endorse a normal output rise of one million barrels crude oil each day.
A notable drop in Saudi Arabia's crude output last month and supply disruptions in Venezuela and Libya hurt as well.
Yet the future of the bloc, which includes arch-enemies Saudi Arabia and Iran, is so uncertain that Rosneft PJSC, the Russian state-run oil company, told investors on Tuesday it didn't know whether OPEC+ or some other combination of producers would be calling the shots in the near future.
United States sanctions on Iran's energy sector are set to be re-imposed after a 180-day "wind-down period" ending on November 4.
US crude production has climbed dramatically, fueled largely by increased output from shale formations, but may now rise more slowly as prices drop.
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.