FILE PHOTO: Oil flows from a spout of Edwin Drake's original 1859 fountain, which powered the modern oil industry at the Drake Well Museum and Park in Titusville, Pennsylvania, USA, on October 5, 201
7. REUTERS / Brendan McDermid / File Photo  The US is planning to reintroduce sanctions against Iran, which will produce about 4 percent of world oil supplies, after an agreement reached at the end of 2015 has abandoned Tehran's nuclear ambitions in exchange for repealing the US European sanctions.
The sanctions are from an oil market that has worsened due to strong demand, especially in Asia. Saudi Arabia and Russia, the number one, have been trying as a top exporter since 2017 to withhold oil to support prices.
Brent crude futures were trading at $ 77.34 a barrel at 0451 GMT, up 13 cents, or 0.2 percent, from the last close. Brent the day before reached its highest level since November 2014 at $ 78 a barrel.
U.S. West Texas Intermediate (WTI) crude oil futures tumbled 7 cents to $ 71.29 a barrel, still not far from the November high of $ 71.89 a barrel in November 2014.
Many analysts predict that oil prices will rise significantly as the market adjusts to emerging US sanctions and Iranian exports fall with strong demand.
"We expect Iran's exports to fall well before the 180-day deadline for oil sanctions to come into effect, similar to the 2012 sanctions. We expect Iran's exports to reach 500,000 barrels in October per day (bpd) and fall in 1H19 by 1 million bpd, "said the US investment bank Jefferies on Friday in a statement.
However, there are indications that other suppliers of the Organization of Petroleum Exporting Countries (OPEC) will step up their production to counter the disruption to Iran.
"The market is now focusing on the ability of OPEC and other manufacturers to respond to this potential supply disruption," ANZ Bank said Friday.
"Investors are increasingly considering Kuwait and Iraq as the producers that can rapidly increase production in response to a decline in Iranian exports," he added.
Jefferies said that OPEC "has the capacity to replace the Iranian losses," but warned, "even if physical supply is kept constant … the market will still be faced with a precariously low amount of reserve capacity . "
Outside OPEC's rising US crude oil production could help close the supply gap in Iran. It hit a new record last week, rising to 10.7 million barrels a day (bpd).
That's 27 percent more than in mid-2016. This means that US production is getting closer and closer to the top producer Russia, which pumps around 11 million barrels a day.
Reporting by Henning Gloystein; Arrangement by Joseph Radford and Richard Pullin