NEW YORK: Oil prices were steady on Friday and headed for a second consecutive weekly gain as fresh U.S. sanctions on Iran and the latest output plan from the OPEC+ producer group raised expectations of tighter supply.
Brent crude futures was up 3 cents at $72.03 a barrel by 10:52 a.m. EDT [1452 GMT]. U.S. West Texas Intermediate crude futures rose 14 cents, or 0.2%, to $68.21.
On a weekly basis, Brent was on track to rise more than 2% and WTI about 1.7%, marking their biggest gains since the first week of the year.
The U.S. Treasury on Thursday announced new Iran-related sanctions, which for the first time targeted an independent Chinese refiner among other entities and vessels involved in supplying Iranian crude oil to China.
That probably sent a message to the market that Chinese companies, the largest buyers of Iranian oil, are not immune to sanctions pressure from the U.S., said Scott Shelton, energy analyst at TP ICAP.
Thursday’s announcement marked Washington’s fourth round of sanctions against Iran since U.S. President Donald Trump in February promised “maximum pressure” on Tehran and pledged to drive the country’s oil exports down to zero.
Oil prices rise over $1
Analysts at ANZ Bank said they expect a 1 million barrels per day (bpd) reduction in Iranian crude oil exports because of tighter sanctions. Vessel tracking service Kpler estimated Iranian crude oil exports above 1.8 million bpd in February.
Oil prices were also supported by the new OPEC+ plan for seven members to cut output further to compensate for producing more than agreed levels. The plan would represent monthly cuts of between 189,000 bpd and 435,000 bpd until June 2026.
OPEC+ this month confirmed that eight of its members would proceed with a monthly increase of 138,000 bpd from April, reversing some of the 5.85 million bpd of output cuts agreed in a series of steps since 2022 to support the market.
Oil market participants will want to see more proof of Iraq, Kazakhstan and Russia complying with the cuts to gain more support from the plan, StoneX oil analyst Alex Hodes said.
Kazakhstan’s oil output has reached a record high in March on the back of oilfield expansion, further exceeding OPEC+ production quotas, two industry sources told Reuters.
