FX.co ★ Oil Rises on Fresh Iran Sanctions

West Texas Intermediate (WTI) crude oil futures rose by approximately 1.9%, closing at $62.50 per barrel on Wednesday. This increase was driven by new U.S. sanctions imposed on Chinese importers of Iranian crude, which have stirred concerns about supply disruptions. These sanctions are intended to restrict Iran’s oil exports amid the resumption of nuclear negotiations, heightening fears of reduced global supply. Adding to the upward pressure on prices, the Organization of the Petroleum Exporting Countries (OPEC) announced that countries such as Iraq and Kazakhstan plan to implement further production cuts to compensate for past overproduction. In the United States, crude oil inventories rose by 0.5 million barrels, exceeding expectations, even as gasoline and distillate stocks declined. While China experienced stronger-than-anticipated economic growth in the first quarter, oil demand forecasts remain weak, with the International Energy Agency (IEA) projecting the slowest pace of growth in five years for 2025. Additionally, escalating trade tensions between the U.S. and China are casting a shadow over the demand outlook, leading financial institutions like UBS and BNP Paribas to revise down their oil price forecasts.