Oil prices rose today, extending large gains last week that were prompted by tensions between Iran and the US, as Washington was set to announce new sanctions on Tehran. 

West Texas Intermediate crude was up 50 cents, or 0.87%, at $57.93 a barrel in late morning trade. 

Brent futures rose by nine cents, or 0.14%, at $65.29 a barrel. 

US President Donald Trump said on Friday he called off a military strike in retaliation for the shooting down of a US drone by Iran.

He said the potential death toll would be disproportionate, adding yeserday that he was not seeking war. 

Oil prices surged after Iran shot down the aircraft on Thursday that the US claimed was in international airspace and Tehran said was over its territory. 

Brent racked up a gain of about 5% last week, its first weekly gain in five weeks, and WTI jumped about 10%, its biggest weekly percentage gain since December 2016. 

But US Secretary of State Mike Pompeo said "significant" sanctions on Iran would be announced on Monday aimed at further choking off resources that Tehran uses to fund its activities in the region. 

British Foreign Minister Jeremy Hunt said the UK believed neither the US nor Iran wanted a conflict but warned tensions could lead to an "accidental war". 

Also boosting prices, global supply may remain tight as OPEC and its allies including Russia appear likely to extend their oil cut pact at their meeting July 1-2 in Vienna, analysts said. 

Russian Energy Minister Alexander Novak today said international cooperation on crude production had helped stabilise oil markets and is more important than ever. 

"There is a good example of successful cooperation in balancing the oil market between the OPEC countries and non-OPEC. Thanks to joint efforts, we today see a stabilisation of world oil markets," Novak said.

Boosting oil demand, prospects of a near-term interest rate cut by the Federal Reserve aimed at bolstering the US economy have weakened the dollar. 

Oil is usually priced in dollars, and a slide in the value of the weaker greenback makes it cheaper for holders of other currencies.