In return Saudi Arabia will protect USA motorists against an increase in gasoline prices. West Texas Intermediate, the US benchmark for the price of oil, was up 1.51 percent to $75.06 per barrel, its highest level since November 2014.
Traders said the decline in fuel inventories was largely down to the outage at Syncrude Canada's 360,000 barrels per day (bpd) oil sands facility near Fort McMurray, Alberta, which is expected to last through July.
President Donald Trump says OPEC is "doing little to help" rising gas prices and claims "if anything, they are driving prices higher". "Please stop this method", the Iranian oil ministry's news agency quotes Hossein Kazempour Ardebili as saying.
On Tuesday, crude closed near 78 dollars per barrel, driven higher by a sharp drop in US inventories and the expectation of more drivers hitting the road for the July 4 holiday.
In a follow-up Twitter message on July 4, the president said that "the United States defends many of those countries for very little $'s".
Furthermore, the bulls also derived support from an Iranian threat to block shipments through the Strait of Hormuz while comments from the Iranian government, asking Trump to stop tweeting on oil prices, also helped.
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The reduction came a day after Trump took aim at the Organization of the Petroleum Exporting Countries, urging the cartel to "REDUCE PRICING NOW!"
Brent crude futures LCOc1 were at $77.82 per barrel, up 6 cents from their last close.
"With renewed geopolitical risk factors likely to stimulate concerns of supply disruptions, oil prices have scope to extend gains in the near term", Otunuga added. This must be a two way street. "OPEC has not defined oil prices for the past 30 years, it is a financial market and regional hubs for marker crudes who does it?"
The White House is threatening countries which import Iranian oil to stop shipments by November - or face United States sanctions. But the tougher US approach now makes the bank's analysts think that Iran's exports to Europe, Japan, and South Korea-a total of 1 million bpd-would "fall to minimal levels".
In the previous sanctions on Iran between 2012 and early 2016, when Europe also imposed sanctions alongside the U.S.to punish Iran for its nuclear program, Tehran resorted to barter and was offering gold bullions in vaults overseas or crude oil in exchange for food.
Brent crude futures were at $78.12 a barrel at 1050 GMT, down 12 cents.