Oil prices increased on Thursday as concerns are rising over the supply of Iranian crude as the US re-imposed new sanctions on Tehran.

Brent crude futures rose 20 cents to touch at $72.48 barrel while US West Texas Intermediate (WTI) crude futures increased 10 cents to touch $67.04 a barrel.

Mitsubishi oil risk manager Tony Nunan said: “The market is supported by concerns the sanctions on Iran are going to reduce Iranian supply.

“The geopolitical risk from Iran is keeping a floor under the price.”

On Tuesday, the US re-imposed sanctions on some sectors of Iran, which is the third largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC).

The sanctions will not hit Iranian crude oil directly until November.

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US President Donald Trump is looking at as many countries as possible to reduce or stop their oil imports from Iran.

"The market is supported by concerns the sanctions on Iran are going to reduce Iranian supply. The geopolitical risk from Iran is keeping a floor under the price."

Meanwhile, China is imposing 25% tariffs on an additional $16bn imports from the US, which would affect trade goods from fuel and steel products to autos and medical equipment.

This trade war between US and China is raising concerns among investors of any slowdown in their economies, which would in turn affect demand for commodities.

China’s crude imports increased slightly in July following two months of decline.

However, they were still the lowest this year due to a decline in demand from smaller refineries.

China is the world’s largest crude importer. In July, it consumed 8.48 million barrels per day (bpd), up from 8.18 million bpd a year earlier and June’s 8.36 million bpd.

Meanwhile, according to the US Energy Information Administration, crude inventories dropped 1.4 million barrels in the latest week, which is around 50% of the 3.3 million-barrel expected by analysts.

Gasoline inventories had seen an increase of 2.9 million barrels, not the 1.7 million-barrel drop as analysts had expected predicted in a Reuters poll.