Iran, which is a major Middle East oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC), resumed its role as a major oil exporter in January 2016 when worldwide sanctions against Tehran were lifted in return for curbs on Iran's nuclear program.
But US output has soared by more than a quarter in the last two years, to 10.62 million bpd.
"The expectation that the USA will leave the sanctions waivers is leading Iran to sell as much as it can", Petromatrix strategist Olivier Jakob said. Trump has to decide by May 12 whether to bring back sanctions against the country.
In other news, hedge funds cut their net long U.S. crude futures and option positions in the week to May 1 by 11,825 contracts to 444,060, according to the U.S. Commodity Futures Trading Commission. According to a Reuters report, the current backwardation in Brent is the most extreme it has been in more than 25 years, putting it in the 91st percentile of all trading days since 1992. Prices climbed 0.3% last week. The global benchmark crude, which is also on course for the highest close since November 2014, was at a US$5.29 premium to July WTI.
Shannon Rivkin, investment director of Australia's Rivkin Securities, said that oil prices had been driven up "thanks to growing concerns over the economic collapse of Venezuela and its oil industry, plus possible new sanctions against Iran from the Trump administration". The group is yet to accomplish its goal of stabilizing crude markets, Al-Falih said.More news: LeBron James puts Raptors on brink of elimination with insane buzzer-beater
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President Hassan Rouhani said on Sunday Iran had plans to respond to any move by Trump and the US would regret a decision to exit the accord.
While refusing to reveal what he will do on Saturday, Trump reiterated his belief the existing accord is "a awful agreement for the United States", but "that doesn't mean I wouldn't negotiate a new agreement". Meanwhile, America's European allies continue to back the deal, saying it has been essential to reining in Iran's nuclear program.
Oil prices rose to their highest levels since late-2014 on Monday, boosted by Venezuela's deepening economic crisis and a looming decision on whether the United States will re-impose sanctions on Iran.
Crude at US$60 to US$65 a barrel is "suitable", an Iranian official said on Sunday, signaling a split with fellow OPEC member Saudi Arabia, which is said to be aiming for US$80 oil. Since sanctions were eased as of January 2016, Iran's crude production has nearly doubled and its exports soared last month to record levels.
Money managers curbed their enthusiasm for oil just before the USA benchmark price surged, with total wagers on WTI sliding to the lowest since early January. United States energy companies added nine oil rigs looking for new production in the week to May 4, bringing the total count to 834, the highest level since March 2015, energy services firm Baker Hughes said last Friday.