Oil Prices Extend Gains on U.S. Sanctions Against Iran, OPEC+ Output Cuts

Oil prices rose on Friday, heading for a second consecutive weekly gain, as fresh U.S. sanctions on Iran and a revised OPEC+ production plan fueled expectations of a tighter global supply.

Brent and WTI Edge Higher

By 0850 GMT, crude oil benchmarks traded in positive territory:

• Brent crude gained 12 cents (0.2%) to $72.12 per barrel
• West Texas Intermediate (WTI) rose 15 cents (0.2%) to $68.22 per barrel

On a weekly basis, both Brent and WTI were set for over 1% gains, marking their strongest weekly performance since early 2025.

U.S. Tightens Sanctions on Iranian Oil Exports

The U.S. Treasury announced new Iran-related sanctions on Thursday, targeting entities and vessels linked to Iranian crude exports. Notably, the sanctions included an independent Chinese refiner for the first time, signaling Washington’s escalating pressure on Tehran’s oil trade.

• Analysts at ANZ Bank estimate a 1 million barrels per day (bpd) reduction in Iranian crude exports due to stricter enforcement.
• Vessel tracking service Kpler reported that Iran’s crude exports stood at 1.8 million bpd in February.

The move marks Washington’s fourth round of sanctions since U.S. President Donald Trump’s February pledge to enforce “maximum pressure” and reduce Iran’s oil exports to zero.

OPEC+ Adjusts Output to Compensate for Overproduction

Beyond the U.S. sanctions, oil prices found support from OPEC+’s latest production plan, aimed at correcting excess output among certain members:

• Seven OPEC+ producers agreed to additional monthly cuts of 189,000 to 435,000 bpd until June 2026.
• Meanwhile, eight members will increase output by 138,000 bpd starting April, partially reversing the 5.85 million bpd of cuts implemented since 2022.

Market Outlook: Supply Risks and Geopolitical Uncertainty

With tighter Iranian supply, OPEC+ adjustments, and broader geopolitical tensions, market sentiment remains bullish. Investors will closely monitor:

• Further enforcement of U.S. sanctions on Iranian oil
• OPEC+’s ability to maintain discipline in output cuts
• Macroeconomic data influencing global demand trends

For now, oil markets remain on edge, balancing supply constraints against global economic uncertainties.