By Georgina McCartney
HOUSTON (Reuters) – Oil prices rose nearly 2% on Wednesday to a two-week high on concerns about global supplies after Washington issued new sanctions targeting Chinese importers of Iranian oil.
Brent crude futures settled up $1.18, or 1.8%, to $65.85 a barrel, while U.S. West Texas Intermediate crude ended $1.14, or 1.9%, higher at $62.47.
Both benchmarks closed at their highest levels since April 3, according to data from LSEG.
The U.S. on Wednesday issued new sanctions targeting Iran’s oil exports, including against a China-based “teapot refinery”, as President Donald Trump seeks to ramp up pressure on Tehran and drive Iranian oil exports down to zero.
The action comes as the U.S. government has relaunched negotiations with Iran over its nuclear programme this month.
Meanwhile, Iran’s right to enrich uranium is not negotiable, Foreign Minister Abbas Araqchi said ahead of the next round of talks in Rome on Saturday.
The Organization of the Petroleum Exporting Countries has received updated plans for Iraq, Kazakhstan and other countries to make further oil output cuts to compensate for pumping above agreed quotas, the group said, further buoying oil futures.
Elsewhere, U.S. crude stockpiles rose while gasoline and distillate inventories fell last week, the Energy Information Administration said.
Crude inventories rose by 515,000 barrels to 442.9 million barrels in the week ended April 11, the EIA said, compared with analysts’ expectations in a Reuters poll for a 507,000-barrel rise.
TRUMP TARIFFS
The International Energy Agency said on Tuesday that global oil demand growth this year will be the lowest since 2020, when demand contracted due to the COVID-19 pandemic.
“The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” said Federal Reserve Chair Jerome Powell.
Oil futures pared some gains after Powell gave his remarks.
Trump has ratcheted up tariffs on Chinese goods, prompting Beijing to impose retaliatory duties on U.S. imports.
“The world economy hinges in large part on whether the U.S. and China can come to an agreement and not start a prolonged trade war,” Alex Hodes, director of market strategy at financial services firm StoneX, said in a note.
A Bloomberg report quoted an anonymous source as saying that China wants more respect from the Trump administration before it will agree to trade talks, analysts said.
