Oil Rebounds After New Sanctions on Iran

Brent futures climbed 0.5% to $74.78, while U.S. West Texas Intermediate (WTI) crude futures rose 0.5% to $70.72.

Oil prices edged higher on Monday as new U.S. sanctions on Iran and Iraq’s commitment to offset overproduction added to concerns over short-term supply shortages, helping the market partially recover from Friday’s steep losses.

Global benchmark Brent crude, which closed Friday at its lowest level since February 6, gained 35 cents (0.5%) to $74.78.

Meanwhile, U.S. WTI crude futures rose 32 cents (0.5%) to $70.72 per barrel, rebounding from their lowest closing price of the year in the previous session.

Reasons Behind the Rebound

On Monday, the United States imposed new sanctions targeting Iran’s oil industry, affecting more than 30 brokers, tanker operators, and shipping companies involved in the sale and transport of Iranian crude, according to the U.S. Treasury Department.

This move likely had a modest impact on oil prices, alongside Iraq’s reaffirmation of its commitment to OPEC+ supply agreements. However, Iranian crude exports remain high for now, and it remains to be seen whether the sanctions will have a lasting effect.

Oil Market Action

Meanwhile, Iraq announced plans to compensate for exceeding its OPEC+ production quotas in recent months. The country is set to export 185,000 barrels per day from Kurdistan’s oil fields through the Iraq-Turkey pipeline once shipments resume, according to an Iraqi Oil Ministry official on Sunday.

As a result, oil prices rebounded from the previous session’s sharp drop, when expectations of resumed northern Iraqi exports and potential de-escalation in the Ukraine war drove benchmark contracts down by more than $2.