While South Korea has halted imports from Iran and reports in India indicate it may also bow to the U.S. campaign, Washington's entreaties to Beijing have proved fruitless, two unnamed officials told Bloomberg.
U.S. West Texas Intermediate (WTI) crude futures were up 19 cents, or 0.3 percent, at $68.68 barrel.
Markets also anticipated an announcement from Washington later on Monday on renewed US sanctions against major oil exporter Iran.
Still, with Russian Federation, the USA and Saudi Arabia now all producing 10-million to 11-million barrels a day of crude, just three countries now meet about a third of global oil demand. Brent crude futures settled at $73.21 per barrel, down 24 cents from their last close.
What's next for Iran oil?
Outside the U.S., top crude exporter Saudi Arabia pumped about 10.29-million barrels a day of crude in July, two Opec sources said on Friday, down about 200,000 barrels a day from a month earlier. The kingdom told the cartel it produced 10.489 million in June.
Other oil producing countries, led by Saudi Arabia, have vowed to increase production to cover the loss of Iranian oil.
Saudi stockpiles fell by 95 million barrels, or 29%, between October 2015 and the end of April 2018, according to The Joint Organisations Data Initiative (JODI) data, the lowest since 2011. "There's clearly room for them to keep rising and good reason too", said Bloomberg.
Saudi said on Saturday it would resume all oil shipments through the strategic Red Sea shipping lane of Bab al-Mandeb, the state news agency SPA reported, as per CNBC news.
China's largest refiner, Sinopec, will hold off on buying United States crude as the escalating trade battle threatens to make American imports more expensive, according to a person familiar with the matter.
Currently China is the world's top buyer of crude oil, including from Iran, making Chinese refusal to cooperate a major challenge to the US.
According to trade flow data by Thomson Reuters Eikon, Chinese imports of USA crude oil averaged 334,880 bpd between January and August this year.
Whilst exports of crude from the U.S. to China have grown exponentially in recent years, Leszczynski says the volumes are still pretty small from China's point of view.
Meanwhile, the tensions between Washington and Beijing is scaring hedge funds away from an increasingly volatile oil market, according to Bloomberg, with money managers' total positions in the USA benchmark and Brent having slid to the lowest since 2016. "Iran was hoping to sell more than 500,000 [barrels per day] of oil to India in [fiscal year] 2018/2019", the outlet wrote, citing a February statement by Iranian Oil Minister Bijan Zanganeh.