Oil advanced after the US ramped up measures to hobble Iran’s crude exports, increasing pressure on Tehran amid a push for a new nuclear accord. West Texas Intermediate rose as much as 2% to top $68 a barrel, while global benchmark Brent climbed to near $72. The US Treasury Department sanctioned a Chinese oil refinery and its chief executive officer for allegedly buying Iranian oil as well as multiple vessels allegedly linked to a ‘shadow fleet’ of ships that carry the OPEC member’s crude. A maximum-pressure campaign could remove as much as 1.5 million barrels of daily Iranian exports from global markets, according to Jorge Leon, head of geopolitical analysis at Rystad Energy A/S. The sanctions injected a jolt of bullishness into a session that had earlier seen crude drift between gains and losses as markets assessed the Federal Reserve’s US economic outlook. While Fed Chair Jerome Powell said on Wednesday that the central bank is in no hurry to cut rates, the Treasury market boosted its bets on lower rates because of the uncertainty that he highlighted. Still, crude remains markedly below its mid-January peak, as bearish factors pressures prices. While the escalating trade war threatens to reduce energy demand, OPEC and its allies are set to raise output starting April, contributing to a potential global surplus. Member nations that have persistently flouted production quotas, including Kazakhstan, Iraq and Russia, provided updated plans to make additional cutbacks on Thursday. The reductions should – in theory – offset the group’s plans to revive halted output through to the end of next year, in a support to prices. Meanwhile, the Trump administration is poised to extend Chevron Corp.’s deadline to halt its Venezuela operations for at least another 30 days, fending off some concerns of near-term market tightness.

Oil Erases Gains As Traders Assess US Growth Outlook After Fed

Oil prices saw a 2% increase to above $68 per barrel for West Texas Intermediate and near $72 for global benchmark Brent. This was driven by increased pressure on Iran’s crude exports due to US sanctions, including the sanctioning of a Chinese oil refinery and its CEO for allegedly buying Iranian oil. The sanctions could remove up to 1.5 million barrels per day of Iranian exports from the market. Despite the bullish sentiment, crude oil remains below its mid-January peak due to concerns over energy demand from an escalating trade war and OPEC's plans to raise output starting April. Member nations that have flouted production quotas, including Kazakhstan, Iraq, and Russia, have announced plans to make additional cutbacks, which should offset the group's plans to revive halted output. Meanwhile, the Trump administration is set to extend Chevron's deadline to halt its Venezuela operations for another 30 days.