Oil prices closed higher on Friday, recording a second consecutive weekly gain, after the US imposed fresh sanctions on Iran’s oil industry, and Opec+ announced plans to cut output that may tighten supply in the market.
Brent, the benchmark for two thirds of the world’s oil, climbed 0.2 per cent to settle at $72.16 a barrel. West Texas Intermediate, the gauge that tracks US crude, rose 0.3 per cent to $68.28 a barrel.
On a weekly basis, Brent rose 2.1 per cent and WTI about 1.6 per cent, marking their largest gains since the first week of 2025.
Brent's second consecutive weekly advance comes as "oil prices bake in more supply-side risks," Han Tan, chief market analyst at Exinity Group, told The National. "President Trump’s sanctions on a Chinese refinery and terminal operator appear aimed at limiting Iranian output."
On Thursday, the US Treasury Department's Office of Foreign Assets Control announced sanctions against a network supporting Iran's oil exports. The sanctions include designations of new individuals and entities involved in enabling these exports, and are designed to disrupt Iran's financial channels.
“The United States is committed to cutting off the revenue streams that enable Tehran’s continued financing of terrorism and development of its nuclear programme," Secretary of the Treasury Scott Bessent said in a statement on the US Treasury Department's website.
The US also imposed sanctions on 19 entities and vessels responsible for shipping millions of barrels of Iranian oil, comprising part of Iran’s “shadow fleet” of tankers supplying teapot refineries such as China’s Luqing Petrochemical.
The latest move marks the fourth round of sanctions against Iranian oil sales since US President Donald Trump issued “National Security Presidential Memorandum 2” on February 4, ordering a campaign of maximum pressure on Iran to curtail its oil revenue, the statement said.
Oil prices are also being supported by new additional cuts announced by Opec+ members including Saudi Arabia, the UAE, Russia, Kazakhstan, Iraq, Oman and Kuwait to make up for producing more than agreed levels.
The seven countries agreed to monthly cuts of between 189,000 barrels per day and 435,000 bpd lasting until June 2026, Opec said on Thursday.
Earlier this month, the alliance of producers said it would proceed with a “gradual and flexible” unwinding of voluntary production cuts of 2.2 million bpd starting April 1, adding 138,000 bpd per month until September 2026.
"Oil’s attempt to pick itself up from year-to-date lows may be on wobbly legs, given the risk of restored Opec+ supplies, while the demand side could be further strained under a global trade war," Mr Tan said.
Oil prices remained volatile this year amid a number of developments including Mr Trump's trade war, new sanctions on Russia's oil industry and a rise in tension in the Middle East after Israel ended the ceasefire in Gaza with deadly strikes on the enclave.
