Sweeping Iran sanctions target oil, banks

US Secretary of State Mike Pompeo talks with South Korean Foreign Minister Kang Kyung-wha during their meeting at Foreign Ministry in Seoul

U.S. light crude weakened by 30 cents to $63.39, down more than 13% since hitting four-year highs a month ago.

Global markets, including oil, were lifted earlier by hopes that the trade dispute between the world's two biggest economies could be resolved soon.

On Friday, Brent futures LCOc1 traded flat at around $73, having fallen 12 percent since the beginning of October.

USA investment bank Jefferies also warned of a "troubling... shift in structure towards contango", which implies oversupply as it means prices for future delivery are higher than for immediate dispatch.

Traders said prices were weighed down by rising output.

Another key pressure point will be the price of oil, which is politically sensitive in the United States. During a previous round of sanctions at the start of the decade, Iranian oil exports declined at times to below 1 million bpd.

In a presidential memorandum addressed to secretaries of State, Treasury and Energy, Trump said he determined there was sufficient supply of petroleum and petroleum products elsewhere than Iran to permit a reduction in purchases from the Islamic Republic.

Russian production has risen to a record high of 11.41 million bpd in October, up from 11.36 million bpd in September.

U.S. Arab allies Saudi Arabia and the United Arab Emirates as well as Israel have long sought for Washington to work to curtail non-Arab and predominantly Shiite Muslim Iran's influence in the Middle East, including in war-torn Syria.

"This surge has driven the market into oversupply", Jefferies said.

Hours before he spoke, Iranian President Hassan Rohani warned Iranians they could face more economic hardship in the months ahead as the USA imposes a new round of sanctions.

Another country that has been seeking a sanctions waiver is Turkey, which takes significant volumes via pipeline from neighbouring Iran.

USA national-security adviser John Bolton says the White House wants sanctions on Iran's oil sector to put a strain on Iran's economy, but it does not want to harm "friends and allies" that depend on the oil.

"We think Trump will agree to China importing some volumes, similar to the treatment that India and South Korea receive", he said.

"The U.S. may use waivers to slow-walk implementation, but these will not apply indefinitely", Allen said.

Iran will likely still export oil, its main commodity, in some form.

Qassemi said the USA carried out numerous measures and spent huge sums to exert pressure on worldwide banks, companies, commercial enterprises and institutions in order to dissuade them from working with Iran but all such efforts failed to bear fruit.

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