On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 1.20% at $73.45 a barrel.
The US administration is "prepared to work with countries that are reducing their imports on a case-by-case basis", the official added.
USA sanctions on Iran's crude oil exports are due to come into effect from November 4, after being imposed with the aim of stopping Tehran's ballistic missile programme and its involvement in Syria and Iran conflicts.
The official, speaking on the condition of anonymity, said the administration was "in the midst of an internal process" of considering exemptions for major cuts.
India will buy a total of 9 million barrels of oil from Iran in November, foreign media reported yesterday, citing an industry source, despite U.S. sanctions on Tehran to return early next month.
U.S. Sanctions cause Oil Value to Rise
She also said that the ICJ's decision on Iran-U.S. dispute is binding for Washington and must be obeyed. Unlike many other news organizations, we have not put up a paywall.
"Refiners have placed November nominations to lift 1.25 million tonnes (about 9 million barrels) of oil from Iran", a source has told Reuters.
India is the world's third-largest oil importer, and Iran's second-biggest oil customer after China.
India has a strong trade and diplomatic relationship with both Iran and the US.
"India is continuing with its relationship with both its key energy partners Iran and the U.S.", a second source said.
Oil rallied to the highest in nearly four years earlier this month on concerns that OPEC and its allies aren't raising output quickly enough to make up for the squeeze on Iranian shipments. He said that nine million barrels of oil are expected to be purchased.
"The president has directed all of us in the government to come up with steps to re-impose the economic sanctions and to do whatever else is necessary to ensure we bring maximum pressure on the regime to stop its malign behavior across the board - not just in the nuclear field, but across the board", Bolton said on Thursday.