By Anna Hirtenstein
LONDON (Reuters) -Oil prices rose on Friday after new sanctions were imposed on Iran’s crude exports but were on track for a third straight week of decline, hurt by U.S. President Donald Trump’s renewed trade war on China and threats of tariffs on other countries.
Brent crude futures were up 71 cents, or 1%, at $75 a barrel by 1030 GMT, but were poised to fall 2.3% this week. U.S. West Texas Intermediate crude rose 65 cents, or 0.9%, to $71.26 a barrel, down 1.7% on a weekly basis.
The U.S. Treasury said on Thursday it was imposing new sanctions on a few individuals and tankers helping to ship millions of barrels of Iranian crude oil per year to China, in an incremental move to increase pressure on Tehran.
“Trump has talked about maximum pressure (on Iran). The market takes that quite seriously,” said Michael Haigh, global head of commodities research at Societe Generale. The French bank projects that Iranian oil exports are set to halve.
“The imposition of tariffs and the pauses should be bullish for the oil market because it adds uncertainty. But you haven’t seen this response because of demand concerns. Tariffs and tit for tat responses from nations, it hurts global GDP … and oil demand,” Haigh added.
Trump had announced a 10% tariff on Chinese imports as part of a broad plan to improve the U.S. trade balance, but suspended plans to impose steep tariffs on Mexico and Canada.
“Downside pressure has stemmed from the news flow around tariffs, with concerns over a potential trade war fuelling fears of weakening oil demand,” analysts at BMI said in a note on Friday.
Oil prices settled lower on Thursday after Trump repeated a pledge to raise U.S. oil production, unnerving traders a day after the country reported a much bigger-than-anticipated jump in crude stockpiles.
The benchmarks were also under pressure from swelling U.S. crude inventories, which rose sharply last week as demand softened on ongoing refinery maintenance.
(Reporting by Anna Hirtenstein. Additional reporting by Sudarshan Varadhan and Jeslyn Lerh; Editing by Emelia Sithole-Matarise and David Evans)
