A group representing German trade interests said the US decision to withdraw from the Iran nuclear deal will hit German companies and urged the European Union to protect their interests.
Under the deal's auspices, Iran agreed to significantly decrease its enrichment activities and to provide the IAEA with regular access to all Iranian nuclear facilities, in exchange for relief from the nuclear-related economic sanctions imposed against Tehran by the US, EU and the UN Security Council.
Meanwhile, U.S. crude oil production rose to another high at 10.7 million barrels a day, according to EIA's preliminary weekly reading.
The threat of new sanctions comes as demand in Asia, the world's biggest oil-consuming region, hit a record and producers, including the top exporter, Saudi Arabia, and the top producer, Russia, restrict supplies to prop up prices.
Dan Eberhart, CEO of oilfield services company Canary LLC, drew a direct connection: "Withdrawing from the Iran nuclear deal will support higher oil prices".
"Iran's exports of oil to Asia and Europe will nearly certainly decline later this year and into 2019 as some nations seek alternatives in order to avoid trouble with Washington and as sanctions start to bite", said Sukrit Vijayakar, director of energy consultancy Trifecta. Crude topped $70 a barrel this week for the first time in almost four years.
Wall Street opened higher on Wednesday, with shares of energy companies getting a boost from surging oil prices.
As a result, crude oil inventories in major developed nations have fallen sharply in the last year and a half to 2.85 billion barrels, only slightly above their five-year average.More news: LeBron James Or Michael Jordan? Tiger Woods Addresses Basketball's Greatest Debate
More news: One martyred, two critically wounded in South African Shiite mosque attack
More news: Every New House Built In California Will Soon Have Solar Power
Still, he said, oil prices are likely to keep rising. While futures settled lower on Tuesday, having risen through the previous week in the run-up to widely anticipated announcement, they rallied in after-hours trade and into the Asian morning.
As the table below shows, Brent crude oil prices have tracked BlackRock's gulf-focused Geopolitical Risk Indicator.
"It will be more painful for motorists than the past two years - but nothing close to 2011 to 2014 when it was $3.40 to $3.60 a gallon", said Tom Kloza, global head of energy analysis at OPIS. "I don't think we are near those levels when it will act". That will be determined by a range of factors, including how much Iranian crude is restricted by the sanctions and whether other major producers - such as the United States - fill the gap. Saudi Arabia, OPEC's most important member, is pushing to extend the production cuts beyond this year.
"Following the USA decision to withdraw from the nuclear agreement with Iran, Saudi Arabia is committed to supporting the stability of oil markets for the benefit of producers and consumers and the sustainability of the global economic growth", the official said.
Moving to ease market concerns, Saudi Arabia on Wednesday said it would work with other producers to lessen the impact of any shortage in oil supplies.
Iran re-emerged as a major oil exporter two years ago after global sanctions against it were lifted in return for curbs on its nuclear program, with its April exports standing above 2.6 million barrels per day.
A maze of crude oil pipe and equipment is seen with the American and Texas flags flying in the background during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas.
All key crude oil futures contracts saw traded volumes jump as investors took new positions and refiners hedged to protect themselves from higher feedstock prices. Boeing separately struck another 30-airplane deal with Iran's Aseman Airlines for $3 billion at list prices.