Crude oil price rises over $74 as U.S. sanctions tighten supply
Brent crude futures climbed 8 cents (0.1%) to $74.11 per barrel as of 0949 GMT on Friday, extending an eight-day winning streak—the longest since May 2022. U.S. West Texas Intermediate (WTI) crude also edged up 5 cents (0.1%) to $69.97 per barrel.
Both benchmarks have gained about 2.5 per cent this week and nearly 7 per cent since hitting multi-month lows in early March. The continued price rally, marking a third consecutive weekly gain, is attributed to escalating U.S. sanctions on Venezuela and Iran, further tightening global oil supply.
“The potential loss of Venezuelan crude exports to the market due to secondary tariffs and the possibility of similar restrictions on Iranian barrels have created an apparent tightness in crude supply,” June Goh, senior oil analyst at Sparta Commodities, told Reuters.
The latest surge in oil prices is largely driven by shifting U.S. sanctions. President Donald Trump imposed a 25 per cent tariff on potential buyers of Venezuelan crude, complicating trade for the South American country. Additionally, new U.S. sanctions targeting China’s imports from Iran have added further uncertainty to the global oil market.
As a result, trade of Venezuelan crude to its largest buyer, China, has stalled, according to Reuters. Meanwhile, India’s Reliance Industries, operator of the world’s largest refining complex, is expected to halt Venezuelan oil imports due to these sanctions, sources familiar with the matter said.
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Beyond supply constraints, stronger demand in the U.S. has also provided support to oil prices. The Energy Information Administration (EIA) reported that U.S. crude inventories dropped by 3.3 million barrels last week, far exceeding analysts’ expectations of a 956,000-barrel decline.
Despite the rally, uncertainties remain due to geopolitical tensions and economic risks.
“While the market is suffering under extreme uncertainties, we are holding to our forecast for Brent crude to average $76 per barrel in 2025, down from $80 per barrel in 2024,” analysts at BMI wrote in a market commentary.
A higher crude oil price boosts Nigeria’s revenue, but experts warn of inflationary pressures on consumers. Fluctuations in global oil prices have been linked to adjustments in local pump prices, affecting household expenses.
With Brent crude trading near $74 per barrel, Nigeria’s projected oil revenue remains close to the country’s 2025 budget benchmark of $75 per barrel. However, market volatility means the government must navigate potential revenue shortfalls amid fluctuating global demand and supply constraints.
