Oil Prices Rise Amid Supply Concerns and Sanctions on Iran
Brent crude and WTI on track for weekly gains as US sanctions on Iran impact supply outlook.
Oil prices experienced an uptick on Friday, advancing towards a second consecutive weekly gain driven by renewed concerns over supply, following the latest sanctions imposed by the United States on Iran.
By 4:00 p.m. Saudi time, Brent crude futures were recorded at $71.77 per barrel, down 23 cents, or 0.3 percent.
Meanwhile, US West Texas Intermediate (WTI) crude futures fell 13 cents, or 0.2 percent, to $67.94 per barrel.
On a weekly basis, Brent crude was poised for an increase exceeding 1.5 percent, while WTI was set to rise by 1 percent, marking their most significant gains since the beginning of the year.
The US Treasury Department announced new sanctions on Thursday specifically targeting Iranian oil exports, including the first-ever sanctions against an independent Chinese refiner.
These measures aimed at entities and vessels involved in supplying Iranian crude oil to China coincided with an OPEC+ pledge to address overproduction issues, supporting expectations of tighter supply in the oil market.
This recent move represents the fourth set of sanctions against Iran by Washington since former President Donald Trump initiated a campaign of 'maximum pressure' on Tehran in February, aiming to reduce Iranian oil exports to zero.
Analysts at ANZ Bank have predicted a potential reduction of approximately 1 million barrels per day (bpd) in Iranian crude oil exports due to these intensified sanctions, while vessel tracking service Kpler reported Iranian crude oil exports above 1.8 million bpd in February.
Additional support for rising oil prices stemmed from a new plan announced by OPEC+, which involves seven member countries further cutting oil output to compensate for overshooting production targets.
The proposed monthly cuts are projected to range between 189,000 bpd and 435,000 bpd and are expected to continue until June 2026.
OPEC+ has also confirmed that eight of its member countries will increase production monthly by 138,000 bpd starting in April, reversing part of the 5.85 million bpd production cuts that had been agreed upon in previous years to stabilize the market.
However, analysts at ING noted that despite the shared plans for compensatory cuts among OPEC+ members, adherence to these plans may vary as some members have historically produced above their designated target levels.
By 4:00 p.m. Saudi time, Brent crude futures were recorded at $71.77 per barrel, down 23 cents, or 0.3 percent.
Meanwhile, US West Texas Intermediate (WTI) crude futures fell 13 cents, or 0.2 percent, to $67.94 per barrel.
On a weekly basis, Brent crude was poised for an increase exceeding 1.5 percent, while WTI was set to rise by 1 percent, marking their most significant gains since the beginning of the year.
The US Treasury Department announced new sanctions on Thursday specifically targeting Iranian oil exports, including the first-ever sanctions against an independent Chinese refiner.
These measures aimed at entities and vessels involved in supplying Iranian crude oil to China coincided with an OPEC+ pledge to address overproduction issues, supporting expectations of tighter supply in the oil market.
This recent move represents the fourth set of sanctions against Iran by Washington since former President Donald Trump initiated a campaign of 'maximum pressure' on Tehran in February, aiming to reduce Iranian oil exports to zero.
Analysts at ANZ Bank have predicted a potential reduction of approximately 1 million barrels per day (bpd) in Iranian crude oil exports due to these intensified sanctions, while vessel tracking service Kpler reported Iranian crude oil exports above 1.8 million bpd in February.
Additional support for rising oil prices stemmed from a new plan announced by OPEC+, which involves seven member countries further cutting oil output to compensate for overshooting production targets.
The proposed monthly cuts are projected to range between 189,000 bpd and 435,000 bpd and are expected to continue until June 2026.
OPEC+ has also confirmed that eight of its member countries will increase production monthly by 138,000 bpd starting in April, reversing part of the 5.85 million bpd production cuts that had been agreed upon in previous years to stabilize the market.
However, analysts at ING noted that despite the shared plans for compensatory cuts among OPEC+ members, adherence to these plans may vary as some members have historically produced above their designated target levels.