Oil Prices Climb Amid Fresh U.S. Sanctions on Iran

25 Feb 2025 , 10:23 AM

Oil prices extended gains for a second consecutive session on Tuesday. This comes after the U.S. imposed fresh sanctions on Iran, intensifying concerns over potential supply disruptions from the key Middle Eastern oil producer.

Brent Crude and WTI See Modest Gains
Brent crude futures rose by 38 cents (0.51%) to $75.16 a barrel by 0217 GMT, while U.S. West Texas Intermediate (WTI) crude futures climbed 43 cents (0.61%) to $71.13 a barrel. Both benchmarks rebounded after Monday’s session gains, following a sharp $2 drop last Friday.

According to Tony Sycamore, market analyst at IG, WTI is testing a key support range between $65 and $70 a barrel. “If WTI holds above this support zone, a price recovery is expected,” he noted.

U.S. Sanctions Heighten Supply Risks
The latest round of U.S. sanctions targets over 30 brokers, tanker operators, and shipping companies involved in transporting Iranian oil, further tightening the market. The U.S. administration has reiterated its aim to reduce Iran’s crude exports to zero.

Iran, a major player in the Organization of the Petroleum Exporting Countries (OPEC), produced 3.2 million barrels per day in January, according to a Reuters survey. However, geopolitical tensions continue to cloud the global supply outlook.

Demand Outlook Remains Uncertain
Despite supply concerns, oil price gains were tempered by lingering demand uncertainties. U.S. President Donald Trump confirmed on Monday that new tariffs on Canadian and Mexican imports, scheduled for March 4, will proceed as planned. Analysts caution that these tariffs could negatively impact global oil demand growth.

Geopolitical Shifts Influence Market Sentiment
In Europe, Ukraine hosted European leaders to mark the three-year anniversary of Russia’s invasion, but the absence of U.S. officials highlighted the shifting dynamics under President Trump’s administration. Market observers are closely monitoring Trump’s warmer stance towards Moscow, which could signal a potential easing of sanctions on Russia—a move that might boost global oil supply.