Oil Prices Poised for Third Weekly Gain Amid U.S. Sanctions on Venezuela, Iran

Oil prices remained on track for a third consecutive weekly increase on Friday as the United States escalated sanctions on Venezuela and Iran, tightening global supply. However, concerns over the potential impact of Washington’s trade policies on demand limited further gains.

Brent crude futures edged up by 8 cents, or 0.1%, to $74.11 per barrel by 12:49 p.m. Saudi time, marking an eight-day winning streak—its longest since May 2022. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures rose by 5 cents, also 0.1%, to $69.97 per barrel.

Both benchmarks have gained approximately 2.5% this week and are up around 7% since hitting multi-month lows in early March.

Sanctions Fuel Market Tightness

The latest surge in oil prices is largely driven by shifting U.S. sanctions, according to analysts at BMI. On Monday, U.S. President Donald Trump announced a new 25% tariff on potential buyers of Venezuelan crude, further complicating an already volatile market. The move follows recent sanctions targeting Chinese imports of Iranian oil.

As a result, trade flows of Venezuelan crude to China—the country’s largest buyer—have stalled, while India’s Reliance Industries, which operates the world’s largest refining complex, is reportedly halting Venezuelan oil imports.

“The potential loss of Venezuelan crude exports due to secondary tariffs and the possibility of similar restrictions on Iranian barrels have contributed to a tightening supply outlook,” said June Goh, senior oil analyst at Sparta Commodities.

U.S. Demand and Inventory Decline Support Prices

Oil prices also found support from stronger-than-expected demand signals in the United States, the world’s largest oil consumer.

According to the Energy Information Administration (EIA), U.S. crude inventories fell by 3.3 million barrels to 433.6 million barrels for the week ending March 21. This decline significantly exceeded analysts’ expectations of a 956,000-barrel draw, further indicating robust demand.

Trade War Concerns Cap Gains

Despite the bullish supply factors, oil markets faced downward pressure due to broader economic uncertainties. The latest round of U.S. tariffs sparked fears of a trade war, leading to sell-offs in risk assets, including crude oil.

“While the market is grappling with extreme uncertainties, we maintain our forecast for Brent crude to average $76 per barrel in 2025, down from $80 per barrel in 2024,” BMI analysts said in a report.

As the geopolitical landscape continues to evolve, oil markets are expected to remain volatile, with supply concerns competing against macroeconomic risks in shaping future price movements.