US Sanctions, OPEC+ Cuts Drive Oil Price Rally

Oil prices surged this week, with both Brent and West Texas Intermediate benchmarks posting their first weekly gains in three weeks, as new U.S. sanctions specifically targeted Chinese companies importing Iranian oil and increased pressure on Iran's oil sector. Treasury Secretary Scott Bessent stated that the US is applying 'maximum pressure' to disrupt Iran's oil exports, intensifying fears of a tighter global supply. OPEC+ added to the bullish sentiment by announcing further output cuts from members who previously exceeded their quotas. Significant drawdowns in U.S. gasoline and distillate stocks also contributed to the rally. However, forecasters like the IEA, OPEC, Goldman Sachs, and JP Morgan remain cautious, citing lowered expectations for oil supply growth and demand due to slower economic growth in the U.S. and China, persistent trade tensions, and the risk of supply bottlenecks in the U.S. refining sector. Overall, these fresh sanctions and OPEC+ actions outweighed bearish economic indicators, pushing oil prices higher ahead of the Easter holiday.