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* U.S. dollar up after Fed signal on rates
* Iran is heading to presidential polls on Friday
* U.S.-Iran nuclear talks tougher if Iranian hardliner Raisi wins (New throughout, updates prices, market activity and comments; new byline, changes dateline, previous LONDON)
By Scott DiSavino
NEW YORK, June 17 (Reuters) - Oil prices fell from the highest level in years on Thursday as the U.S. dollar strengthened after the Federal Reserve signaled it might raise interest rates as soon as 2023.
That crude price increase came despite an upcoming election in Iran that could scuttle nuclear talks and leave U.S. sanction on Iran's oil exports in place.
Brent futures fell $1.18, or 1.6%, to $73.21 a barrel by 11:19 a.m. EDT (1519 GMT), while U.S. West Texas Intermediate (WTI) crude fell $1.07, or 1.5%, to $71.08.
On Wednesday, Brent settled at its highest since April 2019 and WTI at its highest since October 2018.
The U.S. dollar strengthened to its highest since mid April against a basket of other currencies after the Federal Reserve signaled it might raise interest rates at a much faster pace than assumed.
A firmer greenback makes oil more expensive in other currencies, which could dent demand.
Iran is heading to presidential polls on Friday, with hardline judiciary chief Ebrahim Raisi among the front runners.
"The outcome of tomorrow’s presidential elections in Iran is also likely to lend support to the oil price... Any rapid return of Iranian oil exports is questionable," Commerzbank said in a note.
Washington has sanctioned Raisi for alleged involvement in executions of political prisoners. His election would make it tougher for the United States and Iran to come to an agreement on Iran's uranium enrichment that would allow U.S. sanctions on Iran's oil exports to be lifted.
Analysts have said Iran could boost oil supplies by 1 million to 2 million barrels per day (bpd) if sanctions are lifted.
Saudi Arabia's April crude oil exports fell to their lowest level since June 2020, official data showed.
The number of Americans filing new claims for unemployment benefits, meanwhile, increased last week for the first time in more than a month, but layoffs are easing amid a reopening economy and a shortage of people willing to work. (Additional reporting by Shadia Nasralla in London and Jessica Jaganathan in Singapore; editing by Jason Neely, Elaine Hardcastle and David Gregorio)