- WTI rises amid fresh Iran-related sanctions targeting an independent Chinese refiner.
- Oil prices could gain further support as OPEC+ rolls out a new production cut plan for seven member nations.
- Geopolitical risk premiums on Oil increase as Israel launches a new ground operation in Gaza.
West Texas Intermediate (WTI) Oil price holds ground for the third successive session, trading around $68.40 per barrel during Asian hours on Friday. Oil prices remain on track for their second consecutive weekly increase, driven by new United States (US) sanctions on Iran.
On Thursday, the US Treasury imposed fresh Iran-related sanctions, targeting an independent Chinese refiner along with other entities and vessels involved in supplying Iranian crude Oil to China. Analysts at ANZ Bank, cited by Reuters, anticipate a reduction of 1 million barrels per day (bpd) in Iranian crude exports due to tighter sanctions. Meanwhile, vessel tracking service Kpler estimated Iran’s crude exports exceeded 1.8 million bpd in February but warned that sanctions could obscure actual figures.
Additionally, Oil prices may find further support as OPEC+, the Organization of the Petroleum Exporting Countries, and its allies, implements a new plan for seven member nations to cut production, reducing output by 189,000–435,000 bpd each month until June 2026. While Kazakhstan, Iraq, and Russia are expected to contribute to these reductions, increased production plans for next year could offset the impact.
Earlier this month, OPEC+ confirmed that eight of its members would increase output by 138,000 bpd per month starting in April. This move reverses part of the 5.85 million bpd in production cuts that have been gradually implemented since 2022 to stabilize the market.
Oil prices also remain supported by geopolitical risk premiums. Israel has launched a new ground operation in Gaza, while the US continues airstrikes against Iran-backed Houthi rebels in Yemen. Meanwhile, Russia’s Foreign Ministry spokeswoman, Maria Zakharova, stated that Ukraine had violated a proposed ceasefire on energy infrastructure by attacking a Russian Oil depot.
