USA sanctions on Iran will have a six-month period during which buyers should "wind down" oil purchases, meaning any loss of supply will not be immediately felt in the market.
Futures for September delivery on the Shanghai International Energy Exchange rose 2.1 percent to 475.1 yuan a barrel, climbing for a fourth day.
Saudi Arabia has promised to help offset the loss of any Iranian crude output, saying it "remains committed to supporting the stability of oil markets, benefiting producers and consumers alike".
Trump's decision about the Iran deal isn't the only factor driving up oil and gasoline prices, however. Crude topped $70 a barrel this week for the first time in almost four years.
A year ago, the national average for was $2.34 for a gallon of gas, according to a CNN Money report. The US has increased its production very much in recent months or the previous year, with rising oil prices it has become much more profitable for US oil producers to increase their production; so there's a lot of countries that would benefit from these higher oil prices. Prices gained $2.08 to close at $71.14 on Wednesday, the highest settlement since November 2014.
Crude oil production, meanwhile, has tightened as a global oil glut prompted a slowdown in drilling by Saudi Arabia and other major producers.
OPEC kingpin Saudi Arabia indicated it was ready to act. Do you think this will be a long-term trend or will the market stabilize soon?
Kuwaiti oil minister Bakhit al-Rashidi said his country will work with OPEC and non-OPEC oil producers to limit impact of any possible shortage in supplies, state news agency KUNA reported. By taking this step without the support of most of its allies, including those party to the JCPOA, any impact will likely be less durable, and likely more vulnerable to opportunistic arbitrage, such as China and others snatching up any Iranian crude displaced from other markets. Heightened geopolitical fears in the Middle East often raise prices. It's not clear when an attack could come, nor what form it could take. Washington can not ensure success alone, particularly because it can not offer sufficient heavy oil exports to compensate for the loss of Iranian heavy oil barrels from the market.
Iran produced about 3.8 million barrels of oil per day in April, according to the latest S&P Global Platts OPEC survey.
Net U.S. crude imports fell last week by 955,000 barrels per day to 5.4 million bpd, the lowest since mid-February, the EIA data showed.
Just how much of Iran's growth in oil production is at risk - and when it could decline - is uncertain.
Most analysts believe that at least some nations will ignore the new American sanctions and continue buying Iranian crude.
In addition, current trade tensions between China and the United States mean that Beijing is unlikely to support USA action against Iran.
In the USA, the Energy Information Administration reported nationwide crude inventories slid 2.2 million barrels last week, in contrast to a forecast for a 1 million-barrel gain in a Bloomberg survey. That's the longest rising streak in a month.
That's still a sizable amount of oil, especially considering the strong demand around the world.
Still, Iran will feel the pain from US sanctions, even without cooperation from the other worldwide partners.
Saudi Arabia, for instance, has the ability to crank up output.
Production in the United States is surging thanks to the shale revolution.
"It's quite possible that surging USA shale production could easily fill the gap left by Iran", Eberhart said. In fact, the Energy Information Administration lifted its 2019 domestic output forecast on Tuesday by almost 4% to a record 11.9 million barrels per day.