"It's telling that the multinationals are taking this sanctions business very seriously and are preparing to pull out of Iran. That's really crystallizing the loss of production we're facing," said John Kilduff, partner at energy hedge fund Again Capital.
An updated timeline on the restart of the Syncrude oil sands facility added a jolt of volatility into U.S. crude trading, said Kilduff.
In Canada, majority stakeholder Suncor said on Monday that some Syncrude production would come back online in July, sooner than expected. It will not resume full operations until September, however, which is later than expected.
The 360,000-barrel-per-day (bpd) facility in northern Alberta has been shut since late June, cutting oil flows into Cushing, Oklahoma, the delivery point for U.S. crude futures.
Stocks in Cushing rose slightly between Tuesday and Friday, according to market intelligence firm Genscape, according to analysts who saw the data. Cushing inventories hit a three-and-a-half-year low last week.
"Cushing is clearly screaming out for crude," said Virendra Chauhan, oil analyst at consultancy Energy Aspects.
The tightness at Cushing and the potential increase in Gulf exports "both have implications for how quickly the prompt overhang in the market can clear, and thus provide some direction for prices," Chauhan said.
The market has grown concerned that if the Saudis offset the losses from Iran, it will leave oil markets at risk of further production declines in countries like Venezuela and Libya.