Oil Fluctuates as Market Weighs Iran Sanctions and Trade Uncertainties
On Friday, oil prices experienced a roller coaster ride, initially gaining ground before settling in negative territory. The fourth consecutive weekly decline for West Texas Intermediate crude (CL=F) resulted in a loss of 0.41%. Brent futures (BZ=F) also closed slightly lower, barely breaking a three-week losing streak.
Iran Sanctions and Supply Concerns
Oil prices initially rose by 1% amid concerns over supply following comments from Treasury Secretary Scott Bessent. He stated that the Biden administration aimed to restore Iranian oil exports to pre-Trump levels of 100,000 barrels per day. The U.S. had recently announced sanctions targeting Iran, which could potentially limit supply.
Trade War Concerns Cap Upside
However, the threat of an escalating trade war has tempered price gains. President Trump's plan for reciprocal tariffs and subsequent negotiations on a country-by-country basis have raised concerns about global demand. Dennis Kissler of BOK Financial cautioned that retaliatory tariffs could hamper demand.
Ukraine-Russia Conflict and Surplus
Earlier in the week, oil declined on hopes for a truce in the Ukraine-Russia conflict. JPMorgan analysts maintain their 2025 Brent price outlook at $73 per barrel, but project a significant surplus in 2026, driving prices below $60 by year-end.
Market Outlook
WTI remains slightly below its January opening price, while Brent has gained less than 1% since then. The market is closely monitoring developments in Iran, trade negotiations, and the Ukraine-Russia conflict, which will continue to impact oil prices in the coming weeks.