Oil is on track for its second straight weekly gain, driven by supply concerns

Oil prices climbed on Friday, set for a second consecutive weekly gain, as fresh U.S. sanctions on Iran and OPEC+’s latest output plan heightened expectations of tighter supply.

Brent crude futures rose 12 cents (0.2%) to $72.12 a barrel by 0850 GMT, while U.S. West Texas Intermediate (WTI) crude futures gained 15 cents (0.2%) to $68.22.

Both Brent and WTI were on track for weekly gains exceeding 1%, their largest since early January.

The U.S. Treasury introduced new Iran-related sanctions on Thursday, targeting an independent Chinese refiner and other entities involved in Iranian crude exports to China. Analysts at ANZ Bank anticipate a reduction of 1 million barrels per day (bpd) in Iranian crude exports due to these tighter restrictions, while vessel tracking service Kpler estimated February’s exports exceeded 1.8 million bpd.

Additionally, oil prices found support from OPEC+’s new plan for seven members to implement deeper output cuts to offset previous overproduction, with reductions ranging between 189,000 and 435,000 bpd until June 2026.

OPEC+ announced this month that eight of its members will implement a monthly production increase of 138,000 barrels per day (bpd) starting in April. This move partially reverses the 5.85 million bpd in output cuts enacted through a series of measures since 2022 to stabilize the market.