Global oil prices increased on March 24 driven by U.S. sanctions on Iran and ongoing discussions on a potential ceasefire in Russia’s war in Ukraine.
Russia’s war in Ukraine continues to significantly influence global oil markets, with international negotiations in Saudi Arabia potentially restructuring energy supply chains and market strategies.
Washington allegedly intends to conclude a separate ceasefire agreement in the Black Sea until a broader ceasefire agreement is reached.
According to Reuters, Brent crude futures rose 0.5% to $72.52 a barrel, while U.S. West Texas Intermediate crude increased 0.6% to $68.68.
Ole Hansen, head of commodity strategy at Saxo Bank, told Reuters that oil prices are stable as traders weigh new U.S. tariffs, economic risks, and rising OPEC+ supply. He added that stronger U.S. sanctions could cut Iran’s oil exports.
On March 21, global oil prices rose, ending the week with another substantial rise. The market was supported by new U.S. sanctions against Iran and the latest OPEC+ plan to limit production, which increased expectations of a supply cut.
The day before, on March 20, Washington imposed additional sanctions aimed at limiting Iranian oil exports. According to the U.S. State Department, for the first time, a Chinese refinery was subject to restrictions.
The sanctions could reduce global oil supply by 1 million barrels per day, although this could be partially offset by increased production in OPEC+, Ashley Kelty of Panmure Liberum told Reuters.
Last week, OPEC+ unveiled a new production cuts schedule for the seven countries to compensate for the excess of quotas. This reduction will exceed the planned production increase that is to take place next month.
Currently, OPEC+ maintains a cap of 5.85 million barrels per day, or about 5.7% of global supply, in several stages starting in 2022 to support the market.
Tim Zadorozhnyy
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