Yesterday's close above the key resistance line paves the way for a test of the $80 barrel mark, before a retest of the YTD high.
Since spring when the Trump Administration said it would impose sanctions on Iran, crude traders have priced in a risk premium reflecting the supply shortages that may occur when exports from the third-largest OPEC member are cut.
Benchmark Brent crude oil was up 50 cents at $77.87 a barrel by 0750 GMT.
With Middle East crude markets also tightening because of the US sanctions against Iran, many Asian refiners are seeking alternative supplies, with South Korean and Japanese imports of USA crude hitting a record in September.
According to tanker tracking data compiled by Bloomberg, at least five tankers owned by the National Iranian Tanker Company (NITC) have been sitting fully laden with crude oil off the Kharg Island oil terminal in the Persian Gulf over the past two and a half weeks. South Korea says that it continues talks with the USA for a possible waiver.
Gordon Gray, of HSBC, warned the market not to rule out a return to $100 a barrel, saying the multi-year price spike is "not out of the question".More news: Trump comments sting in Puerto Rico amid slow storm recovery
More news: In Surprise Move, Putin Proposes Signing Peace Pact With Japan This Year
More news: Putin says two Skripal poisoning suspects are 'civilians'
S&P global Platts said OPEC, in a report, indicated demand for the organization's own crude oil in September will be nearly 1 million bpd more than the level produced in August.
In January Brent crude hit $70 a barrel for the first time since December 2014.
USA crude oil production fell by 100,000 bpd to 10.9 million bpd as the industry faces pipeline capacity constraints.
"Going forward, economic uncertainty, and hence questions surrounding global oil demand, coupled with geopolitical tensions, will need to be factored into maintaining a balanced market in the months to come", the report said.
A six-country monitoring committee overseeing the OPEC/non-OPEC supply accord will meet September 23 in Algiers to assess market fundamentals and potentially make output policy recommendations.
OPEC said it expects demand growth of 1.41 million bpd in 2019, a 20,000-bpd downgrade from its previous forecast.
Iran's September exports are expected to plunge and "average as little as 1.5 million barrels a day in September according to the preliminary loading program, compared to around 2.8 million barrels a day of oil exports in April and May", Amrita Sen, chief oil analyst at Energy Aspects, said in a note to clients, carried by Bloomberg.