Oil prices firmed slightly on Wednesday, supported by concerns that the United States may reimpose sanctions on major exporter Iran, although soaring US supplies capped gains.

Brent crude oil futures were at $73.23 per barrel at 0430 GMT, up 10 cents, or 0.1 per cent from their last close. U.S. West Texas Intermediate (WTI) crude futures were up 30 cents, or 0.5 per cent, at $67.55 per barrel.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), re-emerged as a major oil exporter in January 2016 when international sanctions against Tehran were lifted in return for curbs on Iran's nuclear programme.

Iran's oil exports hit 2.6 million barrels per day (bpd) in April, the Oil Ministry's news agency SHANA reported on Tuesday, a record since the lifting of sanctions, with China and India buying more than half of Iran's oil. The United States, however, has expressed doubts over Iran's sincerity in implementing those curbs and President Donald Trump has threatened to re-impose sanctions.

Trump will decide by May 12 whether to restore US sanctions on Tehran, which would likely result in a reduction of its oil exports. “If Trump abandons the deal, he risks a spike in global oil prices... The re-introduction of US sanctions would hurt Iran's ability to transact in dollars,” said Ole Hansen, head of commodity strategy at Saxo Bank. “A reintroduction of sanctions without seeing other OPEC-members increase production could remove an estimated 300,000-500,000 bpd of Iranian barrels,” he added.

Some analysts, however, said there was a risk that price could slump as too many oil traders were betting on renewed sanctions. “If the geopolitical tension subsides or results in a smaller supply disruption than currently priced in, we are likely to see a sharp pull-back in investor positioning and an even sharper correction in oil prices than the $5 or so that might be warranted even as macro uncertainties persist,” US bank Citi said in a note to investors.

Beyond the threat of new Iran sanctions, other factors prevented crude prices from rising further. US crude inventories rose by 3.4 million barrels to 432.575 million in the week to March 27, according to a report by the American Petroleum Institute on Tuesday.

Rising inventories are in part a result of soaring US production, which has jumped by a quarter in the last two years to 10.6 million bpd, making the United States the world's number two crude oil producer behind only Russia, with 11 million bpd.

More US oil will likely flow. US drillers added five oil rigs looking for new production in the week to April 27, according to energy services firm Baker Hughes, bringing the total count to a March 2015 high of 825.

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