On Tuesday, Brent crude held above $110 on supply concerns as some Iranians renewed their threat to block Arab oil from leaving the Gulf. This was amidst fears over demand growth stemming from protracted negotiations over Greece's debt capped any gains.
The United States would impose more sanctions after the EU agreed to ban imports of Iranian crude from July, President Barack Obama said.
Gaining for a second day, front-month Brent crude rose 6 cents to $110.64 a barrel by 0215 GMT. U.S. crude fell 5 cents to $99.53, closing above the 50-day moving average of $99.13 and touching an intraday high of $100.24.
"Markets are grappling with demand side issues and supply side concerns, and this will keep oil prices trending higher gradually, in a very narrow range," said Natalie Robertson, an analyst at ANZ. "Higher prices run the risk of derailing the nascent recovery we are seeing in the United States."
"With the diplomatic process continuing to be emphasized, we continue to see the highest short term risk revolving around a pre-emptive sales embargo by Iran in response to tighter sanctions," analysts at JPMorgan said in a report.
Tehran should respond to the plan by stopping sales to the bloc immediately, said Ali Fallahian, a member of Iran's influential Assembly of Expert, responding to European sanctions.