On Friday, western media reported that South Korea will not lift any Iranian crude and condensate in July, halting all shipments for the first time in six years amid US pressure to cut all imports of Iranian oil from November.
But by 0528 GMT, U.S. West Texas Intermediate (WTI) crude futures were up 13 cents, or 0.2 percent, from their last settlement at $$73.07 per barrel.
Concerns that oil prices will be weighed down by a trade conflict between the US and China have faded to some extent, analysts said.
U.S. crude was bullish after official data on Thursday showed inventories at Cushing, the delivery point for United States crude futures, fell to their lowest in three-and-a-half years. Brent, the global benchmark, rose 1.3% to $78.13.
Shares of top oil marketing companies led the gains on NSE index, as US-China trade war fears weighed on oil prices. For the week, WTI futures lost about 0.5% after hitting a 3-year high on Tuesday, while Brent lost about 3%.
Although just 5 percent of China's overall crude imports, these supplies are worth $1 billion a month at current prices - a figure that seems certain to fall should a duty be implemented.
Oil prices dipped on Friday as markets grew more nervous ahead of a raft of import tariffs set to be imposed later in the day by the world's two biggest economies, the United States and China, threatening global growth.
That came after an outage at a major Canadian oil sands facility cut regional supply.
US tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday.
Although the current list of products caught in the tariff war does not include energy-related products, oil traders continue to monitor the events because Beijing has threatened a 25-per cent tariff on USA crude imports.
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In an early sign of future times, an executive from China's Dongming Petrochemical Group, an independent refiner from Shandong province, said his refinery had already cancelled US crude orders.
South Korea is the world's fifth-largest crude oil importer, and diversity of supplies is vital.
Oil prices initially fell on Friday, along with Asian stock markets.
The potential trade war between the United States and China comes amid a tight oil market.
John Driscoll, director of consultancy JTD Energy, suggested that China may even replace American oil with crude from Iran: "They [Chinese importers] are not going to be intimidated or swayed by USA sanctions".
"The embassy of the Republic of Korea denies any claims that it would not lift any Iranian crude and condensate in July", the South Korean embassy responded to the report.
Two other sources said South Korea cancelled July loadings of crude and condensate cargoes from Iran as it was uncertain whether the country would receive an exemption from U.S. sanctions on Iran trade.
"Venezuela ... will lose another 400,000 barrels a day by year-end, with production going to below 1-million barrels a day", FGE said, noting that another 300,000 barrels a day of Libyan capacity was disrupted.
Although Saudi Arabia and Russian Federation have said they would raise output to make up for disruptions, FGE said there simply is not enough capacity to make up for Iran's crude losses, plus Venezuela and Libya, and warned of the possibility of oil prices rising to $100 per barrel.