Oil prices rose on Thursday as new U.S. sanctions targeting Iran, including Chinese “teapot” refiners and vessels supplying Iranian crude, heightened geopolitical tensions. Brent crude settled up $1.22 (1.72%) at $72, while WTI’s April contract expired at $68.26, up $1.10 (1.64%). The more actively traded May WTI contract rose $1.16 (1.73%) to $68.07.
OPEC+ released a schedule for additional oil output cuts from seven member nations, including Russia, Kazakhstan, and Iraq, ranging from 189,000 to 435,000 barrels per day through June 2026. Meanwhile, U.S. crude inventories rose by 1.7 million barrels, surpassing expectations.
Despite these bullish factors, a strengthening U.S. dollar, up 0.5%, put pressure on oil prices by making crude more expensive for foreign buyers. The Federal Reserve held interest rates steady but maintained projections for two rate cuts this year, citing tariff-related economic uncertainties.
Geopolitical risks intensified as Israel launched new ground operations in Gaza, breaking a nearly two-month ceasefire, and the U.S. continued strikes on Houthi targets in Yemen. Trump reaffirmed plans to hold Iran accountable for future Houthi attacks while also maintaining a tough stance on Venezuela, Iran, and Russia.
J.P. Morgan analysts expect Brent crude to recover into the mid-to-high $70s in the coming months before falling below $70 later in the year, averaging around $73. Analysts predict a “choppy upward drift” in oil prices, influenced by China’s stimulus measures and ongoing geopolitical tensions.