An aerial view of an oil field in Iran.
Doha, Qatar: Oil prices settled higher on Friday and recorded a second consecutive weekly gain as fresh US sanctions on Iran and the latest output plan from the OPEC+ producer group raised expectations of tighter supply. Brent crude futures rose 16 cents, or 0.2%, to settle at $72.16 a barrel. US West Texas Intermediate crude futures rose 21 cents, or 0.3%, to $68.28. On a weekly basis, Brent rose 2.1% and WTI about 1.6%, their biggest gains since the first week of the year. On Thursday, the US, noted Al-Attiyah Foundation in its Weekly Energy Market Review.
Treasury announced new Iran-related sanctions, which for the first time targeted an independent Chinese refiner among other entities and vessels involved in supplying Iranian crude oil to China. That probably sent a message to the market that Chinese companies, the largest buyers of Iranian oil, are not immune to sanctions pressure from the US, analysts said. It was Washington’s fourth round of sanctions against Tehran since President Donald Trump in February promised “maximum pressure” and pledged to drive Iran’s oil exports down to zero.
The tightening US sanctions regime will probably keep some market participants involved in shipping Iranian crude more cautious going forward. Oil prices were also supported by the OPEC+ plan for seven members to cut output further to compensate for producing more than agreed levels. The plan would represent monthly cuts of between 189,000 bpd and 435,000 bpd until June 2026.
Asian spot liquefied natural gas (LNG) prices rose slightly this week but remained close to a three-month low amid ample supply and mild weather forecasts. The average LNG price for May delivery into north-east Asia was at $14.60 per million British thermal units (mmBtu), up from $13.40 per mmBtu last week, industry sources estimated.
Meanwhile, Asian demand for contracted LNG, such as from Qatar, is strong with oil-linked contracts trending at a discount to spot prices. In particular, Qatari deliveries to Taiwan have been above the five-year average in Q1 while deliveries to China are picking up in March, likely displacing US LNG which has been subject to a 15% tariff since February 10, analysts said.
Asian prices are expected to remain stable this week, supported by steady European gas movements, mild weather forecasts, ample supply projections, and rising expectations of restocking needs. In Europe, above-average temperatures and a partial recovery of wind generation are expected to keep prices range-bound next week but could rise later in March as temperatures drop below seasonal averages.
