Home Oil and Gas Brent crude oil trades at $70 a barrel as U.S sanctions Iran oil export

Brent crude oil trades at $70 a barrel as U.S sanctions Iran oil export

by Business News Report

Brent crude oil hovered at $70 per barrel on Friday amidst fresh round of sanctions on Iranian oil exports by the United States. Following a bearish market, Brent climbs by 0.7% trading at $70.26 per barrel, up from $69.77 at the previous session’s close. The US benchmark, West Texas Intermediate rose by 0.8%, settling at $67.02 per barrel, compared to its prior session close of $66.51. Further exacerbating market concerns, the US administration has imposed new sanctions on Iran’s oil exports. In a statement on Thursday, the US Treasury Department announced that Iranian Petroleum Minister Mohsen Paknejad was added to the sanctions list. Several companies operating in China, India, and other nations that own or operate vessels transporting Iranian oil were also sanctioned.
The measures target Iran’s so-called ‘shadow fleet,’ used to ship oil to China, with Washington reaffirming its commitment to reducing Iranian oil exports to zero.
At the same time, global demand concerns are deepening as US President Donald Trump escalates trade tensions with the EU. Trump has threatened to impose a 200% tariff on all alcoholic beverages imported from the EU unless Brussels swiftly removes a 50% tariff on American whiskey. Analysts warn that retaliatory tariffs could slow economic growth in the short term, dampening energy demand, while prolonged trade conflicts may disrupt global commerce. Despite the recent price rise, concerns over slowing global oil demand growth and a potential supply glut continue to limit gains. In its latest oil market report, the International Energy Agency revised its global oil demand growth forecast downward by 70,000 barrels per day, now projecting an increase of 1.3 million barrels per day for the year. The agency expects 60% of this demand growth to come from Asia while highlighting the risk of oversupply in the market.
In its latest monthly oil market report, the International Energy Agency, IEA, highlighted risks that trade and tariff uncertainty pose to oil demand. The agency expects global oil demand to grow by a bit over 1 million barrels per day in 2025.

The agency revised lower demand growth estimates for the fourth quarter of 2024 and the first quarter of 2025.  It estimates that global oil supply grew by 240,000 barrels per day in February as OPEC+, and in particular Kazakhstan, saw output hit a record high. Non-OPEC+ supply is forecast to grow by around 1.5m b/d this year, while OPEC+ supply depends on what the group does with supply cuts after April. The IEA forecasts that the global oil market will be in a 600k b/d surplus in 2025.  There’s a risk that this will grow to 1m b/d if OPEC+ unwind cuts through the year.
The gasoil crack continues to come under pressure, trading below US$17 per barrel and to its lowest level this year.
Improved middle distillate flows through the Suez Canal supported the move lower in the crack. However, further weakness may be limited given that Amsterdam-Rotterdam-Antwerp (ARA) gasoil stocks have declined for 5 consecutive weeks, falling by 95kt over the last week to 2.27mt.
US natural gas storage fell more than expected over the last week. Energy Information Administration (EIA) data shows that working storage fell by 62bcf, more than the 50bcf the market was expecting. Total storage is now 11.9% below the five-year average. The release provided some short-term support to the market. However, forecasts for warmer weather over parts of the US made it short-lived.

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