A truck used to carry sand for fracking is washed in a truck stop in Odessa, Texas.

Oil prices rose in cautious trade on Tuesday as expectations of higher U.S. shale output and inventories vied with worries that crude supply from the Middle East could be disrupted by looming U.S. sanctions on Iran and growing tensions with top producer Saudi Arabia.

The disappearance of a Saudi Arabian journalist Jamal Khashoggi in Turkey has strained U.S.-Saudi ties and provoked international outcry and fears that supplies from the world's top crude exporter may be affected.

U.S. Senator Lindsey Graham accused Saudi Crown Prince Mohammed bin Salman of ordering the murder of Khashoggi and said the prince was jeopardizing relations with the United States.

"The focus within the oil trade during the next couple of weeks is likely to be on Iran and Saudi Arabia," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

"We don't expect the Kingdom to be as accommodative to the White House requests for stronger production," he said, adding that the Saudis could cut as much as 500,000 barrels per day of production "as a warning shot should the U.S. opt to impose any type of sanction in response to the Khashoggi developments."