Oil rises on Iran sanctions

Oil prices rose on Thursday, extending gains on growing evidence of disruptions to crude supply from Iran and Venezuela and after a fall in U S crude inventories.

Benchmark Brent crude oil was up 20 cents higher at $69.61.

Brent has risen by almost 10 percent over the last two weeks on widespread perceptions that the global oil market is tightening and may run short in the next few months as U.S sanctions restrict crude exports from Iran.

Iranian crude exports will likely drop to just over 2 million barrels per day in August, versus a peak of 3.1 million bpd in April, as importers bow to American pressure to cut orders.

"The oil market is once again tightening " said Giovanni Staunovo, analyst at Swiss bank UBS in Zurich. "Iranian oil exports declines are already visible well in advance of U.S. oil-related sanctions, which enter into force in November."

The OPEC countries, in which Iran is the third biggest producer, will discuss in December whether it can compensate for a sudden drop in Iranian supply after sanctions start in November, the head of Iraq's state oil marketer SOMO, Alaa al Yasiri, said on Wednesday.