Crude oil futures recorded some gains, driven by concerns over tightening supply from new U.S. sanctions on Iran, which target over 30 entities involved in Iranian oil transport.
The sanctions exacerbate supply risks from one of OPEC’s largest producers, with the U.S. aiming to reduce Iran’s crude exports to zero.
If other OPEC members do not bridge the supply gap, a supply shortfall could follow, potentially raising prices. Additionally, heightened heating oil demand due to colder weather could further support prices.
Meanwhile, President Trump’s proposed tariffs on Canadian and Mexican imports could increase production costs, affecting economic activity and energy consumption and potentially dampening oil demand.
Furthermore, the ongoing war in Ukraine adds a layer of geopolitical risk, with potential shifts in supply from Russia. If sanctions on Russia were eased, it could increase global supply, applying downward pressure on prices. While geopolitical tensions could continue to provide short-term support, broader demand concerns and changing supply dynamics may lead to volatility in the oil market.
