Brent crude futures settled at $74.66 a barrel, up 37 cents, or 0.5% but fell nearly 3% this week. U.S. West Texas Intermediate crude finished at $71.00 a barrel, up 39 cents, or 0.55%, but down about 2% this week.
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 fueling 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.