* Sanctions against Iran expected to tighten global oil markets
* But global markets down as U.S., China threaten more tariffs (Adds U.S.-China trade comments, updates prices)
SINGAPORE, Aug 10 (Reuters) - Oil prices on Friday edged up on worries that reimposed U.S. sanctions against Iran would tighten supplies, although the escalating trade dispute between Washington and Beijing held markets back from further gains.
Front-month Brent crude oil futures were at $72.20 per barrel at 0406 GMT, up 13 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up by 5 cents at $66.86 a barrel.
Despite the possibility of a slowdown in economic growth due to escalating trade tensions, oil markets are for now relatively tight, analysts said, mostly because of sanctions on Iranian oil exports the United States plan to implement in November.
Although many other powers, including the European Union and major Asian buyers such as China and India oppose sanctions, many are expected to bow to American pressure.
"Iranian exports are set for a 'cliff edge exit' from the market in Q4 2018," BMI Research said in a note.
"We do not believe that sanctions have been fully priced into Brent, leaving room for a significant run up in prices towards the end of the year," it said.
Analysts expect the drop-off in Iranian crude exports to range between 500,000 barrels per day (bpd) and 1.3 million bpd, with buyers in Japan, South Korea and India already dialing back orders.
The reduction will largely depend on whether major buyers of Iranian oil in Asia, including India, South Korea and Japan, receive sanctions waivers that would still allow some imports.
It was also not clear whether China, the biggest buyer of Iranian crude, will bow to Washington's pressure.
Friday's markets traded cautiously, though, amid heightened tensions between Washington and Beijing.
"The market seems to be focused on fears of reduced demand from China, partially due to the effects of the trade wars between China and the United States," said William O'Loughlin, investment analyst at Australia's Rivkin Securities.
On a weekly basis, Brent is set for a 1.5 to 2 percent fall, while WTI is heading for a drop of around 2.5 percent.
In the latest round, China said it would impose additional tariffs of 25 percent on $16 billion worth of U.S. imports, which would include refined products, autos and medical equipment.
Although crude was dropped off the list, replaced by refined product exports, many analysts say Chinese imports of American crude will still drop significantly.
"China announced to retaliate the U.S. government's latest tariff round with duties on petroleum products including gasoline and diesel, but not yet crude oil itself The news spooked the market," said Norbert Ruecker, head of the Macro and Commodity Research division at Swiss bank Julius Baer.
"Already we are hearing that Chinese refiners are holding back on U.S. crude, despite escaping tariffs ... We suspect U.S. exporters would struggle to completely replace buyers if China shuns U.S. oil," ANZ bank said in a note on Friday. (Reporting by Henning Gloystein in Singapore; Additional reporting by Gary McWilliams in Houston; Editing by Eric Meijer and Tom Hogue)