Oil Firms Amid Iran Sanctions, Russia-Ukraine Ceasefire Talks
Oil prices rose in choppy trading on Monday as investors weighed the impact of new U.S. sanctions on Iranian exports versus talks to end the war in Ukraine, which could boost Russian crude supplies to global markets.
Brent crude futures rose 36 cents, or 0.5%, to $72.52 a barrel by 1004 GMT. U.S. West Texas Intermediate crude was up 40 cents, or 0.6%, at $68.68.
"Crude remains rangebound as traders continue to weigh the impact of new U.S. tariffs, the risk of an economic slowdown, as well as increased OPEC+ supply starting next month and the prospect of tighter U.S. sanctions that could reduce supply from Iran," said Ole Hansen, head of commodity strategy at Saxo Bank.
Both oil benchmarks closed higher on Friday and posted their second straight weekly gain as new U.S. sanctions on Iran and the latest output plan from producer group OPEC+ raised expectations of tighter supplies.
The U.S. on Thursday imposed new sanctions aimed at hitting Iranian oil exports, including what the State Department said was the first U.S. action targeting China’s “teapot refineries” that process crude.
“Some analysts estimate that the sanctions could take up to 1 million barrels per day of production off the market – although this would likely be replenished by increased OPEC output,” said Ashley Kelty at Panmure Liberum.
Meanwhile, U.S. and Russian officials were in Saudi Arabia on Monday for talks on a broad ceasefire in Ukraine, with Washington also targeting a separate Black Sea maritime ceasefire deal while a broader deal is being negotiated.
The OPEC+ oil producer group last week issued a new timetable for its seven member states to make further oil output cuts to compensate for pumping above agreed levels, which would more than cover the monthly output increases due to be introduced next month.
OPEC+ has cut output by 5.85 million barrels per day, equivalent to about 5.7% of global supply, in a series of moves since 2022 to support the market.
Comments from U.S. President Donald Trump also gave traders hope that tariffs announced earlier in April may not be as severe as feared.
Trump signaled on Friday that there would be flexibility on tariffs and that his top trade chief planned to speak with his Chinese counterpart.
Source: Investing.com
