Other sanctions, including those targeting Iranian crude, will resume in November.
The market appeared to move past the renewal of USA sanctions against Iran, the world's fifth largest oil producer, which underpinned crude futures in the previous session.
West Texas Intermediate, the United States benchmark, shed 2% to $67.70 per barrel after the Ministry of Commerce released a new list of American goods that will be subject to tariffs.
Less than a year after first oil from the U.S. was imported into India, state-owned Indian Oil Corp (IOC) has signed up to buy crude oil from the USA through a term-tender deal, a senior company official said.
"Visible weekly product stocks remain generally at or below five-year averages, a boon for crude demand and margins".
Some sanctions against Tehran, which had been lifted since 2015 under the Iran nuclear deal, were reimposed Monday.
President Donald Trump tweeted on Tuesday that the sanctions were "the most biting sanctions ever imposed".
Also last week, US energy companies cut oil rigs for a second time in the past three weeks as the rate of growth has slowed over the past couple of months. Iran is the third-largest producer in oil cartel Opec.
Some sources have said with exports falling, Iran's domestic refinery runs have increased, with a pick-up in gasoline output observed at some of its refineries, and more barrels are expected to go onto floating storage. But with opposition from other signatories of the agreement, especially among European allies, Sayed said it's becoming hard to guess how many barrels will be off the market by November.
International Olympic Committee is buying 2 million barrels of U.S. Mars for November delivery, one million barrels of Mars and Eagle Ford each in a combination cargo for December delivery, and 2 million barrels of Louisiana Light Sweet (LLS) to be delivered in January next year, Sharma said.
"We are going to work with individual countries on a case-by-case basis, but our goal is to reduce the amount of revenue and hard currency going into Iran", Reuters quoted a senior U.S. administration official as saying on Monday.
The sanctions did not include Iran's oil exports. "Despite some comments from USA officials on possible exemptions, we believe there has been no shift in the administration's policy stance on Iran".
Exports to China rose to 799,452 bpd in July from 722,100 bpd in June, while Iranian oil sales to India increased by more than 40,000 bpd from June to 706,452 bpd in July, S&P Global Platts data shows.