Oil dropped to a seven-month low as concern eased that U.S. sanctions on Iran will squeeze worldwide supplies.

Crude settled down in New York on Monday after climbing earlier as American sanctions against OPEC’s No. 3 producer formally kicked in. The Trump administration granted waivers to China and seven other major buyers so they can continue buying some Iranian crude. Meanwhile, expanding domestic inventories dampened worries about tightening global supplies.

“The reality of the waivers is there will be some Iranian oil left on the market, but it’s still going to be an amount that the market’s going to miss,” said John Kilduff, a partner at New York-based hedge fund Again Capital LLC.

Oil slid from a four-year high last month as speculation grew that Washington would grant the waivers to lower gasoline prices ahead of the U.S. midterm elections, while other producers in the Organization of Petroleum Exporting Countries pledged to offset any supply gaps. Meanwhile, a trade war between the world’s two biggest economies stoked concern that fuel demand would suffer even as President Donald Trump said he wants to reach a pact with China.

At the key pipeline hub in Cushing, Oklahoma, crude stockpiles probably rose by 2.1 million barrels last week, according to a forecast compiled by Bloomberg.


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West Texas Intermediate crude for December delivery lost 4 cents to end the session at $63.10 a barrel on the New York Mercantile Exchange. Futures slid 6.6 percent last week. Total volume traded Monday was about 10 percent below the 100-day average.

Brent futures for January settlement added 34 cents to settle at $73.17 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $9.96 premium to WTI for the same month.

U.S. Secretary of State Mike Pompeo said the waivers will only allow purchases of Iranian crude temporarily. Iran can either change its behavior or see its economy collapse, he said.

Other oil-market news: Gasoline futures fell 1 percent to close at $1.6919 a gallon.  Saudi Arabia raised pricing for the medium and heavy  crudes it sells to Asian customers, a sign that OPEC’s biggest producer sees robust demand for the grades. Oil skeptics have been proved right in downplaying sanctions against Iran. In sanctions-weary Iran, hope has become a rare  commodity.