By Christopher Alessi and Amrith Ramkumar

Oil prices rose Monday after heightened rhetoric between the U.S. and Iran added to investor concerns that crude exports from the Islamic Republic could be at risk.

Light, sweet crude for September delivery rose 1.3% to $69.16 a barrel on the New York Mercantile Exchange, after falling in three consecutive weeks. Brent crude, the global benchmark, was up 0.9% at $73.71 a barrel. Prices have recently fallen from multiyear highs hit earlier this year with investors worried that the supply disruptions that have fueled much of the rally might be easing.

But President Donald Trump late Sunday tweeted a message to his Iranian counterpart, Hassan Rouhani, warning that threats against the U.S. will be met with consequences few in history have suffered. The tweet appeared to refer to comments Mr. Rouhani had made warning against hard-line U.S. policies against Iran.

Mr. Trump in May withdrew the U.S. from a 2015 international agreement to curb Iran's nuclear program, setting the stage for the reimposition of economic sanctions that are expected to hinder Iran's oil industry. Analysts have estimated up to one million barrels a day out of Iran's more than 2.5 million barrels a day of crude exports could be at risk.

The U.S. has threatened to slap sanctions on countries that don't cut oil imports from Iran to "zero" by Nov. 4. While supply uncertainty surrounding other countries including Libya and Venezuela has boosted oil, some investors say the wide range of outcomes regarding Iranian oil exports could spur further market volatility.

"Iran holds the key for the oil balance in the coming months. Its exports are clouded by uncertainty following the reintroduction of U.S. oil sanctions," said Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd.

At the same time, oil prices have been tempered by rising supply from the Organization of the Petroleum Exporting Countries -- led by Saudi Arabia -- and producing allies like Russia following a decision in late June to begin ramping up output after more than a year of holding back production.

That and other "neutralizing factors," including the "escalation of the global trade conflict and possible negative effects on oil demand," have limited the market's reaction to the latest threats by Mr. Trump against Iran, Commerzbank analysts said in a note to clients.

Market participants were looking ahead to weekly U.S. inventory data scheduled to be released Wednesday for the latest update on domestic stockpiles.

Among refined products, gasoline futures added 0.7% to $2.0830 a gallon. Diesel futures were recently up 0.9% at $2.1227 a gallon.

Write to Christopher Alessi at christopher.alessi@wsj.com and Amrith Ramkumar at amrith.ramkumar@wsj.com

(END) Dow Jones Newswires

July 23, 2018 10:55 ET (14:55 GMT)

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