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Oil prices rose in Asian trading on Friday after U.S. President Donald Trump tightened sanctions on Iranian oil and shipping, although they were set for weekly losses on oversupply concerns amid Russia-Ukraine ceasefire talks and escalating trade tensions.

Brent Oil Futures expiring in May rose 0.4% to $70.16 per barrel as of 21:25 ET (01:25 GMT), while West Texas Intermediate (WTI) crude futures gained 0.5% to $66.58 per barrel.

Both contracts were set to fall to slip 0.3% this week. They closed over 1% lower in the previous session amid an escalating Trump trade war.

US imposes sanctions on Iran’s oil minister and ’shadow fleet’

The Trump administration intensified its "maximum pressure" campaign against Iran on Thursday by imposing sanctions on Iranian Oil Minister Mohsen Paknejad and targeting entities and vessels associated with Iran’s "shadow fleet," which is used to circumvent existing sanctions.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced these measures, highlighting that Iran utilizes a complex network of tankers and shipping firms across multiple jurisdictions to transport its petroleum to international markets.

Tactics such as falsifying documentation, manipulating vessel tracking systems, and frequently changing vessel names and flags are employed to evade detection, OFAC added.

These actions aim to disrupt Iran’s capacity to fund destabilizing activities through its oil exports and to reinforce the U.S. commitment to preventing Iran from acquiring nuclear weapons and supporting militant groups.

Oil prices were also helped by data showing softer-than-expected U.S. inflation readings for February.

IEA forecasts an oversupplied market in 2025

Traders are currently evaluating the potential for an oversupplied oil market, considering several key developments.

The U.S. has initiated ceasefire negotiations between Russia and Ukraine, aiming to stabilize the region and ensure uninterrupted energy supplies. A successful ceasefire could lead to increased oil exports from the area, contributing to global supply.

Meanwhile, the International Energy Agency (IEA) projected that global oil supply may surpass demand in 2025, due to a downward revision in demand growth forecasts.

“The macroeconomic conditions that underpin our oil demand projections deteriorated over the past month as trade tensions escalated between the United States and several other countries,” IEA wrote in its monthly report.

Moreover, OPEC+ members, including Saudi Arabia, Russia, Iraq, Kuwait, the UAE, Algeria, Kazakhstan, and Oman, plan to incrementally reverse their voluntary output cuts starting in April 2025.

OPEC+ said on Wednesday that its oil production rose by 363,000 barrels per day to 41.01 million bpd in February.  

– Source: investing.com