International benchmark Brent crude traded at around $72.80 on Friday morning, little changed from the previous session, while U.S. West Texas Intermediate (WTI) stood at $67.43, down around 0.3 percent.
Meanwhile, the U.S. dollar climbed to a 13-month high against a basket of six major currencies on Monday, amid renewed financial turmoil in Turkey. The greenback edged around 0.1 percent higher during early afternoon deals, trading at 96.460 against major peers.
Typically, crude futures trade inversely to the greenback. A stronger dollar makes oil more expensive to much of the world, so oil prices tend to fall as the dollar rises.
To be sure, recent strength in the U.S. currency has fueled a cautious mood in oil markets. Yet, bullish sentiment found some support from expectations that looming U.S. sanctions against Iran could significantly hamper its crude exports.
"It feels like self-harm at the moment in the oil market," Paul Hickin, EMEA oil analyst at S&P Global Platts, told CNBC's "Squawk Box Europe" on Monday.
"With these risks from sanctions, from the escalating trade war with China and even from smaller local things like with Turkey, it all feeds into a risk to the demand picture further out," he added.
Iran sanctions
The U.S. started reinstating sanctions against Tehran last week, with a second set of potentially more damaging measures due to follow in early November. Iran is OPEC's third-largest oil producer — behind Saudi Arabia and Iraq — and currently pumps around 3.65 million barrels per day, according to Reuters data.
The last time Iran was sanctioned, about half its current oil exports of some 2.4 million barrels were removed from the market. However, this time around, many energy analysts believe sanctions will remove far less, maybe around half the prior amount.
On Friday, the International Energy Agency (IEA) warned the energy market outlook could become "far less calm" as U.S.-imposed oil sanctions against Iran take effect.
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