Meanwhile, in the US, crude inventories fell 1.35 million barrels last week, according to the EIA, well shy of the 3-million-barrel drop expected by analysts surveyed by Bloomberg. Since beginning of the year, Cushing crude oil inventories have declined by 50 percent. At the end of the week, WTI settled at 68.49 US dollars, while Brent settled at 73.21 dollars.
After two consecutive daily advances, WTI has now eroded those gains and retreated to the area of multi-day lows at shouting distance from the $68.00 mark per barrel.
Saudi Arabia's crude production dropped about 200,000 bpd last month, two sources at the Organization of the Petroleum Exporting Countries said on Friday, despite a pledge by the Saudis and top producer Russian Federation to raise output from July, with Saudi Arabia promising a "measurable" supply boost.
"A full embargo seems unlikely and the oil market should remain well balanced in light of rising production and the emerging markets' fuel inflation pains", Norbert Rucker, head of macro and commodity research at bank Julius Baer, said.
The Guardian of the United Kingdom reported that the commander of Iran's elite Revolutionary Guards, whose forces patrol the Strait of Hormuz, had stated that the guards were ready to put Rouhani's words into action if necessary.
Spot Brent crude oil futures were at $73.42 per barrel at 0653 GMT on Monday, up 21 cents, or 0.3 percent, from their last close.
Traders were also scrutinizing weekly data on US crude stockpiles, which showed inventories fell by 1.4 million barrels in the week through August 3. Some 19 million and 4.8 million barrels per day of oil pass through the Straits of Hormuz and Bab el-Mandeb, respectively.
For the past week, crude imports averaged 7.9 million barrels a day, up by 182,000 compared with the previous week.
Most Iranian crude exports go to China and India, but roughly 20 percent go to Europe, where refiners have already cut their purchases.
USA gasoline futures fell 3.8 percent to $2.025 per gallon. On November 5th, the United States will resume sanctions against Iran's energy-related financial transactions. Earlier today, crude oil sold off after it was announced that Saudi Arabia has resumed oil shipments through the Red Sea shipping line of Bab al-Mandeb over the weekend.
The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded down about 0.3%, at $25.64 in a 52-week range of $21.70 to $29.87.