Oil Prices Edge Higher Amid U.S. Sanctions on Iran but Close Another Bearish Week

Oil prices rose modestly on Friday, February 7, 2025, as markets reacted to U.S. sanctions targeting Iranian oil exports to China.

However, the gains failed to offset a third consecutive week of losses for crude, reflecting persistent bearish sentiment driven by geopolitical tensions and global economic uncertainty.

West Texas Intermediate (WTI) crude settled at $71.00 per barrel, up 0.55% or $0.39 for the day, while Brent crude closed at $74.66 per barrel, gaining 0.49% or $0.37.

Despite these daily increases, WTI and Brent recorded weekly declines of 2.10% and 1.15%, respectively. The week began with prices above $72 for WTI and $75 for Brent but saw a steady decline before Friday’s slight recovery.

The U.S. Treasury’s sanctions targeted a network facilitating Iranian oil shipments to China, raising concerns about potential supply disruptions from the Middle East.

Analysts like Alex Hodes from StoneX noted that markets are still assessing the impact of these sanctions on global supply chains. However, broader market dynamics, including oversupply concerns and weak demand forecasts, continued to weigh on prices.

Renewed tariff threats from U.S. President Donald Trump against China and other trading partners further dampened sentiment. These threats heightened fears of slower global economic growth. Such a slowdown could reduce energy demand in key markets like Asia and Europe.

WTI and Brent Oil

Technical analysis showed WTI facing resistance at $72 and support near $70. Traders are closely monitoring whether prices might dip below this critical level in the coming weeks.

Brent exhibited similar patterns, with resistance near $75.66 providing a ceiling for gains during the week. The geopolitical landscape added further complexity to the market outlook.

The ongoing war in Ukraine remained a focal point as Ukrainian President Volodymyr Zelensky expressed interest in securing additional U.S. support against Russia.

Meanwhile, Russia signaled openness to dialogue but reported no concrete progress toward resolving the conflict. In Europe, discussions within the European Union about easing sanctions on Syria’s oil sector surfaced as part of a broader political transition plan for the region.

Although this development had a limited immediate impact on global oil prices, it highlighted shifting dynamics in regional energy policies. On the supply side, U.S. oil production showed resilience despite declining prices, with the active rig count increasing by six to 577 this week.

However, non-OPEC production growth continues to outpace demand growth globally, contributing to bearish price pressures. Energy-related exchange-traded funds (ETFs) reflected mixed investor sentiment throughout the week.

While some inflows were observed due to geopolitical risks, overall activity suggested caution. Investors weighed short-term volatility against longer-term oversupply concerns.

The market narrative remains one of uncertainty as traders balance geopolitical risks with structural oversupply and weak demand growth forecasts. Analysts project further price declines in the coming months unless significant supply disruptions or demand recoveries materialize.

Friday’s modest gains offered little relief after a week dominated by bearish trends and mounting economic concerns. As February unfolds, market participants will continue monitoring developments in U.S.-China trade relations, OPEC+ production policies, and geopolitical tensions for clues about crude’s next direction.

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