Oil prices were set for a third weekly gain on Friday as the U.S. ramped up pressure on Venezuela and Iran, though worries over whether Washington’s tariff war could curb demand weighed on markets.
Brent crude futures were flat at $74.03 a barrel at 1235 GMT and U.S. West Texas Intermediate crude futures were up 1 cent at $69.93 a barrel.
Both contracts have gained about 2.5% so far this week, and have risen around 7% since hitting multi-month lows in early March.
The main driver of the price rally has been the shifting landscape of global oil sanctions, BMI analysts wrote in a market commentary.
U.S. President Donald Trump on Monday announced new 25% tariffs on potential buyers of Venezuelan crude, days after U.S. sanctions targeting China’s imports from Iran.
The order compounded uncertainty for buyers and saw trade of Venezuelan oil to top buyer China stall. Elsewhere, sources said India’s Reliance Industries, operator of the world’s biggest refining complex, will halt Venezuelan oil imports.
“The potential loss of Venezuelan crude exports to the market due to secondary tariffs and the possibility of the same being imposed on Iranian barrels has caused an apparent tightness in crude supply,” said June Goh, a senior oil analyst at Sparta Commodities.
Oil was also underpinned by signs of better demand in the U.S., the world’s top oil consumer, as the country’s crude stocks fell more than anticipated.
Data from the Energy Information Administration showed U.S. crude inventories fell by 3.3 million barrels to 433.6 million barrels in the week ended March 21, compared with analysts’ expectations in a Reuters poll for a 956,000-barrel draw.
With April’s start next week, OPEC+ will begin its program of monthly increases to oil production.
The group, which comprises OPEC and allies led by Russia, will likely continue to raise oil output in May, Reuters reported on Monday.
OPEC+ is simultaneously attempting to raise output targets for members that have been disciplined in meeting their previous targets, while pressuring other producers that have exceeded their targets to rein in output and pump below target for a time to compensate.
Some downward pressure came as oil mirrored broader risk asset sell-offs on Friday as the latest tariff salvo from Trump stoked investor worries of an all-out trade war.
As a result, analysts don’t expect sharp gains in oil prices to be sustained in the current environment.
“While the market is suffering under extreme uncertainties, we are holding to our forecast for Brent crude to average $76 per barrel in 2025, down from $80 per barrel in 2024,” the BMI analysts wrote.
(Reporting by Paul Carsten in London and Siyi Liu in Singapore; editing by Shri Navaratnam, Mark Heinrich and Jan Harvey)
