Investing.com-- Oil prices rose Friday after U.S. President Donald Trump tightened sanctions on Iranian oil and shipping, although traders were still nervous about oversupply concerns, the Russia-Ukraine ceasefire talks and escalating trade tensions.
At 09:20 ET (13:20 GMT), Brent Oil Futures expiring in May rose 0.5% to $70.22 per barrel, and West Texas Intermediate (WTI) crude futures gained 0.5% to $66.87 per barrel.
Both contracts closed over 1% lower in the previous session amid an escalating Trump trade war.
Putin delays Ukraine ceasefire
Boosting sentiment Friday were the diminishing prospects of a quick end to the Ukraine war that could bring back more Russian oil back onto the global markets.
The U.S. and Ukraine agreed to a 30-day ceasefire in principle during their meeting in Saudi Arabia earlier in the week. But Russian President Vladimir Putin sought a number of clarifications and conditions that appeared to rule out a quick end to the fighting.
US imposes sanctions on Iran’s oil minister and ’shadow fleet’
The Trump administration has intensified its "maximum pressure" campaign against Iran 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.
IEA forecasts an oversupplied market in 2025
However, the market is still evaluating the potential for a global trade war given President Trump’s trade tariffs, which could hamper global economic activity, as well as the potential for the Orginazation of Petroleum Exporting Countries, and allies, to increase supply.
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.
(Ayushman Ojha contributed to this article.)