Oil rebounded from the biggest weekly loss in two months as speculation of a crude-supply shortage took precedence over escalating trade tensions between the world’s two-biggest economies.

Futures in New York added as much as 0.8 percent after a 2.9 percent slide last week. South Korea didn’t receive any oil from Iran last month, a sign of how impending U.S. sanctions could curb the producer’s sales at a time when FGE predicts OPEC has barely enough spare capacity to ease an oil squeeze. Meanwhile, President Donald Trump ratcheted up a trade war with China, saying on Friday that he’s ready to tax all imports at short notice.

Crude prices have rallied since the lows of August as concerns over global supplies outweighed growing fears of contagion from an emerging-market rout and anxiousness the U.S.-China trade war could imperil energy consumption. Despite OPEC’s pledge to raise output to compensate for lost production, the International Energy Agency said robust demand is likely to tighten the market this year, putting upward pressure on prices.

“The supply situation involving Iranian crude is likely to support prices for the time being,” Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone from Seoul. “But it’s going to be a volatile market, with a number of other factors weighing in, such as the U.S.-China trade conflict.

Oil Rebound

West Texas Intermediate for October delivery rose as much as 53 cents to $68.28 a barrel and traded 44 cents higher at $68.19 on the New York Mercantile Exchange at 2:28 p.m. in Singapore. Prices declined $2.05 to $67.75 last week. Total volume traded was about 21 percent below the 100-day average.

Brent for November settlement climbed as much as 62 cents to $77.45 a barrel on the ICE Futures Europe exchange. Prices rose 33 cents to $76.83 on Friday, while it fell 0.8 percent last week.

Brent’s premium to the U.S. marker is on course for the widest close in almost three months, with the global benchmark trading at a $9.37 premium to WTI. Hedge fund bets on rising Brent prices jumped to the highest in two months earlier last week, according to data released Friday.

South Korea became the first of Iran’s top-three oil customers to fulfill a hard-line U.S. demand that buyers cut imports to zero ahead of sanctions on the Islamic republic to be reinstated in November. The Asian nation didn’t import any crude from the OPEC member last month, compared with 194,000 barrels a day in July, tanker-tracking and shipping data compiled by Bloomberg show.

Fragile supply from countries such as Venezuela and Libya may tighten oil markets this year, and U.S. output will remain stuck in a pipeline bottleneck until new connectors come online next year, IEA Executive Director Fatih Birol said in a Bloomberg television interview. World spare capacity, including those of OPEC and Russia, is likely to be lower than what the market has historically needed to avoid price volatility, industry consultant FGE said.