Oil prices rose on Friday as U.S. sanctions on Iran are expected to cut significant volumes of crude from the market.

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Brent crude oil futures were at $75.19 per barrel at 0640 GMT, up 46 cents, or 0.6 percent, from their last close. Brent is on track for a 4.7 percent weekly rise.

U.S. West Texas Intermediate (WTI) crude futures were at $68.32 per barrel, up 49 cents, or 0.7 percent. WTI is heading for a 3.7 percent weekly increase.

Traders said the supply versus demand outlook for oil markets was relatively tight because of the looming U.S. sanctions against Iran, which will target oil exports from November.

Iran is the third-biggest producer within the Organization of the Petroleum Exporting Countries (OPEC), exporting on average around 2.5 million barrels per day (bpd) of crude and condensate this year, equivalent to around 2.5 percent of global consumption.

"Third-party reports indicate that Iranian tanker loadings are already down by around 700,000 bpd in the first half of August relative to July, which if it holds will exceed most expectations," U.S. investment bank Jefferies said on Friday.

"We expect that by Q4 the market will be dealing with either undersupply, dwindling spare capacity - or both," it added.

Energy consultancy FGE says it expects Iran`s crude and condensate exports to drop below 1 million bpd by mid-2019.

Despite this, sentiment in markets was cautious, traders said, after U.S. and Chinese officials talks aimed at resolving an escalating trade dispute ended on Thursday with no major breakthrough. Instead, both countries activated another round of duelling tariffs on $16 billion worth of each other`s goods.

"Investors are likely to feel nervous as the two countries vow to step up the pressure," ANZ bank said on Friday.

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Yet amid the escalating trade war, China`s Unipec will resume purchases of U.S. crude oil in October, sources told Reuters on Friday, after a two-month halt due to the trade dispute between the world`s two largest economies.

Despite this, many analysts expect U.S. crude to be hit with tariffs eventually should no solution be found.