US oil price went up on Friday after dropping almost 2 percent in the previous session.
US crude oil is not on the list of 545 products the Chinese government has said it would immediately retaliate with in response to American duties.
USA crude futures fell on Thursday as official data showed the country's oil inventories rose unexpectedly last week.
A rise in U.S. crude oil inventories C-STK-T-EIA weighed on prices after stocks rose by 1.2 million barrels in the week to June 29, to 417.88 million barrels, according to the U.S. Energy Administration (EIA) on Thursday.
Oil benchmarks went in different directions again on Friday afternoon, with WTI trading up and Brent trading down as fears of the escalating U.S.
Early Friday, WTI Crude was down 0.78% at $72.37, and Brent Crude traded down 1.23% at $76.44.
"If the Saudis and others replace the losses from Iran, there will be basically no spare capacity left", Societe Generale analyst Michael Wittner said.
Looming over the oil markets is the trade dispute between the United States and China, the world's two biggest economies.
India is also facing USA pressure, and despite an official stance that it will continue buying Iranian crude, some large buyers are already winding down imports on fears their access to American bank financing will be closed if they violate the sanctions.
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.
USA oil output is increasing but is unlikely to be able to fill the supply gap if US sanctions are successful in blocking Iranian exports.
USA markets also garnered support from a government employment report showing better-than-expected growth in jobs.
He added that his refinery had canceled US crude imports and would switch to Middle East or West African supplies instead.
The Organization of the Petroleum Exporting Countries and other countries agreed earlier this month to a modest increase in output to dampen a rally in oil prices, which recently hit a 3-1/2 year high.
Baker Hughes reported an increase in the number of active oil rigs in the United States today.
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 US sanctions". South Korea, a major buyer of Iranian oil and condensate, will not lift any Iranian oil in July for the first time since August 2012, three sources familiar with the matter said on Friday.
"Venezuela.will lose another 400,000 bpd by year-end with production going to below 1 million bpd", FGE said, adding that another 300,000 bpd of Libyan capacity was disrupted.
Top exporter Saudi Arabia told OPEC it raised oil output by nearly 500,000 barrels per day last month, OPEC sources said, a sign Riyadh wants to make up for shortages elsewhere and dampen prices.