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Oil prices rose for a second straight session in Asian trading on Thursday, fueled by renewed geopolitical tensions and supply disruption risks following the U.S. imposition of new sanctions on Iranian oil exports, while investors digested mixed U.S. inventory data.
As of 21:35 ET (01:35 GMT):
- Brent crude (June delivery) was up 0.4% at $66.10 per barrel
- West Texas Intermediate (WTI) rose 0.5% to $62.13 per barrel
Both benchmarks had surged over 2% on Wednesday, rebounding to two-week highs after a sharp pullback earlier in the month.
U.S. Sanctions on Iran Target Chinese Refinery, Raise Supply Risks
The latest catalyst for oil’s rally came as the Trump administration intensified pressure on Iran, unveiling fresh sanctions targeting Chinese firms, including a “teapot” refinery in Shandong province known for importing Iranian crude through back channels.
- The new measures are part of Trump’s “maximum pressure” campaign aimed at cutting Iran’s oil exports to zero
- Sanctions also extend to vessels and intermediaries involved in Iran’s shadow fleet
The timing of the sanctions also coincides with ongoing nuclear negotiations, with talks recently held in Oman, and more scheduled in Rome, adding another layer of complexity to market expectations.
China Signals Openness to U.S. Trade Talks
Oil sentiment was further boosted by a Bloomberg report suggesting Beijing is open to restarting trade negotiations with Washington—though with conditions:
- China seeks “more respect” and consistency from the U.S.
- It wants discussions to include sanctions, Taiwan, and broader trade issues
While not directly energy-related, improved U.S.-China relations could ease broader market risk aversion and support energy demand expectations.
U.S. Crude Inventories Rise, But Fuel Demand Holds Strong
The U.S. Energy Information Administration (EIA) reported a 515,000-barrel build in crude inventories for the week ending April 11, slightly above the 507,000-barrel consensus.
- Total crude stocks now stand at 442.9 million barrels
- This marks the third consecutive weekly build
However, product inventories offered a bullish offset:
- Gasoline stocks fell 2 million barrels to 234 million
- Distillates, including diesel and heating oil, dropped 1.9 million barrels to 109.2 million — the lowest since November 2023
Outlook: Geopolitical Risks Take the Driver’s Seat
With supply fears returning and refined product demand proving resilient, oil prices could maintain upward momentum in the short term—especially if:
- U.S.-Iran tensions escalate
- China and the U.S. resume structured trade talks
- Refinery demand increases heading into the summer driving season
Still, the outlook remains sensitive to:
- Volatility in U.S. inventory data
- OPEC+ supply dynamics
- Broader macroeconomic risks tied to the ongoing trade war and monetary policy shifts
For now, crude may test resistance near $66.50 (Brent) and $63.20 (WTI) if bullish momentum persists.
