Oil prices rose on Friday as U.S. sanctions against Iran looked set to tighten supply, outweighing concerns that global trade disputes will slow economic growth and demand for fuel.
Benchmark Brent crude oil LCOc1 was up 40 cents at $72.47 a barrel by 1350 GMT. U.S. light crude CLc1 was 75 cents higher at $67.56 a barrel.
Escalating trade disputes have cast a shadow over the outlook for economic growth and pushed up the dollar, the currency in which oil is traded internationally, making it more expensive for consumers using other currencies.
Major emerging economies including China, India and Turkey have seen their currencies slump.
But these worries are balanced by the introduction of U.S. sanctions against Iran, which from November will include oil exports and are likely to tighten global supply.
Although the European Union, China and India oppose sanctions, many are expected to bow to U.S. pressure.
Analysts expect Iranian crude exports to fall by between 500,000 and 1.3 million barrels per day, with buyers in Japan, South Korea and India already dialing back orders.
The reduction will depend on whether buyers of Iranian oil receive waivers that would allow some imports.
The International Energy Agency (IEA) said on Friday the oil market could see more turbulence later this year.
“The recent cooling down of the market, with short-term supply tensions easing, currently lower prices, and lower demand growth might not last,” the IEA said in a monthly report.
“As oil sanctions against Iran take effect, perhaps in combination with production problems elsewhere, maintaining global supply might be very challenging.”
Investors are keeping a wary eye on the trade dispute between Washington and Beijing.
In the latest round of levies, China said it would impose additional tariffs of 25 percent on $16 billion worth of U.S. imports.
Although crude was removed from the list, replaced by refined products and liquefied petroleum gas, analysts say Chinese imports of U.S. crude will fall significantly.