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Oil prices rose slightly on Monday to extend gains from last week after U.S. Secretary of State Mike Pompeo said "significant" sanctions on Iran would be announced aimed at further choking off resources that Tehran uses to fund its activities in the region.
Meanwhile, U.S. President Donald Trump said on Sunday he was not seeking war with Tehran and is prepared to seek a deal to bolster Iran's flagging economy in an apparent move to defuse tensions.
Benchmark Brent crude edged up 0.2 percent to $64.56 a barrel while U.S. crude futures were up 0.9 percent at $57.95 a barrel.
Oil is also benefiting from a weaker U.S. dollar on expectations the Federal Reserve may cut interest rates soon to bolster the world's largest economy.
Brent jumped around 5 percent last week and WTI prices soared about 10 percent amid escalating tensions after Iran shot down a drone that the United States claimed was in international airspace and Tehran said was over its territory.
Trump called off planned military strikes against Iran saying that the likely deaths of 150 Iranians would have been out of proportion to the shootdown of an unmanned American surveillance drone.
