There could be a further return of the Persian Gulf country's output. (iStock)
Oil reversed gains after the US lifted sanctions on a former Iranian oil official and two other Iranians involved in oil trading, potentially paving the way for a further return of the Persian Gulf country's output.
Futures in New York slid as much as 1.8% on Thursday before paring losses.
The market has been watching for signs of developments in talks between Iran and world powers to revive a 2015 nuclear agreement, which could spur more Iranian barrels returning to the market.