Oil prices rise amid new sanctions imposed on Iran.

As reported by Ukrinform, this information comes from Reuters.

Brent crude oil futures increased by 38 cents, or 0.5%, reaching $75.16 per barrel. West Texas Intermediate futures in the U.S. rose by 47 cents, or 0.7%, to $71.17 per barrel. Both contracts saw gains during Monday’s session after a $2 drop last Friday.

“In the short term, I believe crude oil is looking for a base. New U.S. sanctions, announced overnight regarding Iran, are likely to support this, as well as Iraq’s oil minister's commitment to manage its excess,” said market analyst Tony Sycamore from IG.

On Monday, the U.S. imposed new sanctions on over 30 brokers, tanker operators, and shipping companies for their role in transporting Iranian oil. President Trump stated that he aims to reduce Iran's crude oil exports to zero.

Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries, producing 3.2 million barrels per day in January, according to a Reuters survey of OPEC output.

Some analysts suggest that the current rise in fuel demand in the West is also contributing to the oil markets.

“The profitability of integrated oil refining worldwide looks high, with a strong crack spread for residual fuel and distillates, particularly in the USGC and NEW, which benefit from demand for fuel oil due to a sharp cold snap,” noted Sparta Commodities analyst Neil Crosby in his commentary, referring to the U.S. Gulf Coast and Northwestern Europe.

According to pricing data from LSEG, the profitability of a typical refinery in Singapore processing regional-grade Dubai crude averaged $3.5 per barrel in February, up from $2.3 per barrel last month.

However, the overall gain has been limited by an uncertain demand forecast.

U.S. President Trump stated on Monday that tariffs on Canadian and Mexican imports, scheduled for March 4, are “timely and on track,” despite efforts by the two trading partners to address Trump’s concerns over border security and fentanyl. Analysts say the tariffs will be bearish for global oil demand growth.

In Europe, Ukraine hosted European leaders to commemorate the three-year anniversary of Moscow's invasion, but U.S. officials stayed away, reflecting President Trump’s warming ties with Russia.

The market views the thaw in Trump’s relations with Moscow as a potential signal for easing sanctions against Russia, which would increase global oil supplies.

“While there are hopes for an end to the war in Ukraine, I don’t think that’s very likely under the conditions promoted by Russia and the U.S., and without broad support from a revitalized Europe,” Sycamore from IG added, noting that the conflict may still support oil markets in the near term.

Photo: Bloomberg