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Stephen Innes, head of trading for Asia-Pacific at brokerage OANDA, said Brent was "supported by the notion that USA sanctions on Iranian crude oil exports will eventually lead to constricted markets", Reuters reported.

No one trading with Iran will do business with America, he said. On top of that, sanctions are set to hit Iran on November 4.

If the US gains the cooperation of its allies to halt imports of Iranian oil, and bring its exports to zero, it will help the Iranian people see their ultimate goal of regime change.

"We will continue by all means to both produce and export" oil, Rouhani said in remarks broadcast on state TV. The secondary sanction could be in various forms but the most throbbing would be being blocked from American financial System which no country could afford.

While a cargo would need to load only in mid-October to arrive in North Asia the following month, its purchase will have to be decided in September. Even if the waivers are provided, they will be based on the promise of keeping flows limited.

According to Hitesh Jain, analyst, commodities, India Infoline, Iran had produced around 3.8 million barrel per day in 2017 and had exported 2.4-2.5 million barrel per day.

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To reach the oil terminal on Khark Island, tankers must now pass through the narrow Strait of Hormuz, slowing down deliveries.

International Brent crude futures fell 37 cents, or 0.5 percent, to $77.80 a barrel. Front-month prices have soared nearly 50 per cent over the past year, and were at $79.17 a barrel at 11:01 am in London on Tuesday.

"Iranian production is already showing signs of decline, falling by 150,000 barrels per day (bpd) last month as importers of Iranian barrels will already be moving away from taking shipments", said Edward Bell, commodity analyst at Emirates NBD bank in Dubai.

It said the strategy was mainly to put a ceiling on crude amid concerns about the impact of high prices on demand as the trade war between Washington and Beijing escalates - and to keep a floor under prices to maintain revenues and market stability. Oil prices were also under pressure as global shippers stopped loading Iranian oil in preparation for USA sanctions against Iran. The country's biggest oil field, Sharara, has restarted following a kidnapping, a person familiar with the situation said on Sunday.

Crude jumped on Tuesday as oil companies shut dozens of offshore platforms in anticipation of damage from Tropical Storm Gordon.

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