Oil Prices Climb on Potential U.S. Sanctions and China Stimulus

Oil prices are poised for their first weekly gain since late November, driven by potential U.S. sanctions against Russia and Iran and emerging economic stimulus in China. Brent crude traded at $73.67 per barrel, while West Texas Intermediate reached $70.34 per barrel.

Treasury Secretary Janet Yellen suggested the current market conditions—with weak demand and ample supply—could be an opportune moment for the U.S. to further reduce Russia's oil revenues. She noted that the global oil market is currently soft, creating potential for additional economic actions.

Traders are also anticipating increased sanction pressure on Iran's oil industry under a potential Trump presidency. Meanwhile, the International Energy Agency (IEA) predicts a global oil market surplus next year, fueled by production growth in non-OPEC countries like Guyana, Argentina, Brazil, Canada, and the United States.

The IEA expects these countries to add approximately 1.5 million barrels per day to global supply. Despite OPEC+ withholding 2.2 million barrels per day, the agency believes this won't be enough to balance the market. Notably, the IEA has revised its demand growth projection upward from 990,000 to 1.1 million barrels per day for the upcoming year.