Front-month Brent crude futures LCOc1 were at $82.17 per barrel at 0133 GMT, up by 83 cents, or 1 percent from their last close, just off Tuesday’s four-year highs.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $72.41 a barrel, up 84 cents, or 1.2 percent from their last settlement.
Traders said oil markets were tightening ahead of Washington’s planned sanctions on Iran’s petroleum industry from Nov. 4.
“We view that crude market risks are heavily skewed to the upside and whilst we are not explicitly forecasting Brent to rise to $100 per barrel, we see material risks of this coming to fruition,” Japanese bank Mitsubishi UFJ Financial Group said in a note to clients.
At its 2018 peak, Iran exported around 3 million barrels per day (bpd) of crude oil, equivalent to 3 percent of global consumption.
Shipping data shows Iran September exports fell to around 2 million bpd as buyers around the world bow to U.S. pressure and cut imports.
The Organisation of the Petroleum Exporting Countries (OPEC) has little spare capacity to make up for an expected shortfall in Iranian exports.
OMAN CRUDE SPIKES
Reflecting expectations of lower supply from the Middle East, Oman crude futures 1OQc1 on the Dubai Mercantile Exchange touched their highest in four years on Wednesday, briefly jumping above $90 a barrel.
“Oil prices remain in the Bulls domain amid concern that U.S. sanctions on Iranian crude oil exports will result in much tighter physical market conditions once they take effect in November,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.
“Markets could still be underestimating the supply crunch from Iran sanctions,” he added.
While global oil markets tighten, supply in the United States is ample, thanks to rising output.
U.S. crude production C-OUT-T-EIA hit a record 11.1 million bpd in the week ending Sept. 21, according to data from the Energy Information Administration (EIA).
That’s an increase of almost a third since mid-2016.
Commercial crude stocks C-STK-T-EIA rose by 1.85 million barrels, to 395.99 million barrels, the EIA data showed.
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