Oil prices climbed for a second consecutive session on Tuesday, as fresh U.S. sanctions on Iran heightened concerns over global supply. Brent crude futures rose above $83 per barrel, while West Texas Intermediate (WTI) edged higher near $78, extending gains from the previous session.
The market reacted to Washington’s latest sanctions targeting Iran’s oil exports, which could further tighten supply in an already fragile market. Iran has been increasing crude shipments despite existing restrictions, and traders fear that stricter enforcement could curb exports, reducing global availability. While Iran has managed to bypass some restrictions in recent years, analysts warn that stepped-up measures could disrupt flows and add volatility to prices.
Beyond Iran, broader geopolitical risks and OPEC+ production policies are keeping traders on edge. The cartel has maintained supply cuts to support prices, and any unexpected shift in policy could impact the market’s balance. Meanwhile, ongoing tensions in the Middle East continue to fuel concerns over potential disruptions, particularly in key shipping routes.
Oil’s rally also comes as investors reassess global demand prospects, with optimism building around China’s economic outlook. The world’s top crude importer has announced new stimulus measures to support growth, raising hopes for a stronger-than-expected recovery in energy consumption. At the same time, supply-side constraints—including declining U.S. crude stockpiles have provided additional support to prices.
While short-term volatility remains likely, traders are closely watching how the sanctions on Iran will play out in the coming weeks. Any signs of a significant drop in Iranian exports could push prices higher, while shifts in OPEC+ policy or unexpected economic weakness could temper gains.
Meanwhile, U.S. shale production remains a wildcard in the supply outlook. While American drillers have ramped up output in recent months, logistical constraints and capital discipline among producers could limit their ability to offset tighter global supplies. If U.S. production growth slows, the market could see even further upward pressure on oil prices in the months ahead.
