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Highlights
- Oil prices extend gains for second straight session
- US sanctions target Chinese refineries linked to Iranian crude
- Potential nuclear deal tensions add to market volatility
Oil prices surged for a second consecutive session following fresh US sanctions aimed at curbing Iran’s crude exports, with markets responding to geopolitical tensions and tighter global supply expectations.
Brent crude futures rose above $66 per barrel, marking a continued rebound after gaining nearly 2% in the previous session. West Texas Intermediate (WTI) hovered around $63 per barrel, setting the stage for the first weekly gain in April. The upward momentum was driven by comments from US Treasury Secretary Scott Bessent, who confirmed that Washington is committed to applying “maximum pressure” on Tehran’s oil revenue streams.
A key development came as the US imposed new sanctions on a Chinese refinery, Shandong Shengxing Chemical, which has allegedly processed over $1 billion worth of Iranian crude. This move follows earlier actions targeting Chinese entities believed to be facilitating Iranian oil shipments in violation of US sanctions.
The US Treasury stated that the latest enforcement reflects a broader strategy to disrupt Iran’s energy exports, a vital component of the country’s economy and political leverage. The crackdown aims to bring Iran’s oil exports down to zero, aligning with long-standing US foreign policy goals toward the Islamic Republic.
In response, Iranian officials have voiced strong criticism. Tehran warned that ongoing nuclear discussions with the US might collapse if Washington continues to shift its demands or escalate pressure. The nuclear negotiations, aimed at reviving a 2015 deal, remain fragile and any setback could further tighten the oil supply outlook.
The implications of these developments extend beyond politics. With global oil demand gradually recovering and supply constraints tightening due to sanctions and production controls from OPEC and allied nations, markets are increasingly sensitive to any news that could impact the balance.
Energy-related companies and traders are closely monitoring the situation, particularly those with exposure to oil logistics and refining. Firms in the energy sector such as Woodside Energy Group (ASX:WDS) and Santos Limited (ASX:STO) could be impacted by shifts in global oil prices, especially as volatility increases in response to geopolitical risks.
While the path forward remains uncertain, the latest moves by the US signal a renewed assertiveness in its sanctions policy. As the oil market digests these changes, traders are recalibrating their outlook for global supply, pricing, and risk.
