Oil moves above $70 a barrel

Oil prices climbed again on Wednesday, with U.S. crude oil futures tacking on gains even after they settled above $70 a barrel on Tuesday for the first time in a month.

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The catalyst? The U.S. wants its allies to halt imports of Iranian oil by November.

“Countries buying oil from Iran should prepare to halt all imports of it starting in November as the United States reimposes sanctions against Tehran, according to Reuters, citing a senior State Department official.

Speaking on condition of anonymity, the official added that "We're going to isolate streams of Iranian funding and looking to highlight the totality of Iran's malign behavior across the region.”

Asked if the United States was pushing allies to cut oil imports to zero by November, the official said, "Yes."

The official said a U.S. delegation would head to the Middle East next week to encourage Gulf oil producers to fill the gap as Iran is cut out of the market.

Commenting on the moves to reduce Iran’s oil exports, Andrew Lebow, senior partner at Commodities Research Group, told FOX business that, “Iranian crude oil exports won’t go to zero. China probably won’t reduce their imports of Iranian crude oil, they might, but probably not.” He added that there will be some hard negotiations. “What will India do? What will the EU do?”

The Organization of the Exporting Countries (OPEC) and key non-OPEC members met Friday to discuss production. As previously reported by FOX Business, they made the decision to increase oil production by around 1 million barrels per day from July, but the real production increase will be smaller because some countries will struggle to return to full quotas while other producers won’t be allowed to fill the gap.

Stateside, the U.S ramped up its crude oil processing last week, while stockpiles of crude shrank. Data released Wednesday from the U.S. Energy Information Administration showed that crude oil stocks declined by 9.89 million barrels in the prior week, the largest weekly drop since September 2016. U.S. refinery utilization hit its highest rate since 2001 while U.S. refiner net input of crude hit its highest levels on record last week.