WTI crude oil price rises above $63 as Iran sanctions and OPEC cuts stoke supply fears
WTI crude futures rally past $63 as supply tightening from Iran sanctions lifts sentiment
West Texas Intermediate (WTI) crude futures climbed above $63 per barrel on Thursday, advancing for the second consecutive session as fresh U.S. sanctions on Iranian oil exports and reaffirmed OPEC+ output cuts reinforced supply concerns. WTI rose from $61.01 on Wednesday to trade near $63.20 during European hours, while Brent crude hovered around $63.66.
The Trump administration announced new sanctions targeting Iranian oil flows, including a Chinese teapot refinery, intensifying market fears of a tighter global supply. The move came amid broader pressure on Tehran over nuclear negotiations. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) confirmed it had received updated production cut plans from Iraq and Kazakhstan, as the group seeks to compensate for recent overproduction and maintain its quota discipline.
Despite the bullish developments, caution persists following earlier downward revisions to global demand forecasts. The International Energy Agency (IEA), OPEC, Goldman Sachs, and JPMorgan all trimmed their oil price and demand outlooks this week, citing ongoing U.S.-China trade tensions and weakening consumption. However, China signaled a willingness to resume trade talks, lending some support to sentiment.
USOIL price dynamics (March 2025 - April 2025) Source: TradingView.
Technical levels in focus as price nears breakout zone
On the technical front, WTI is approaching a key breakout level at $63.34. A close above this pivot could establish a short-term bottom at $55.12 and open room for a push toward the 50-day moving average at $66.97. Weekly gains are now over 2%, putting crude on track for its first weekly rise in April.
The U.S. Energy Information Administration reported a 515,000-barrel increase in U.S. crude inventories last week, contrary to forecasts of a 1.68 million-barrel draw. Still, gasoline and distillate stocks declined by 2 million and 1.9 million barrels respectively, with Cushing storage also down 654,000 barrels, offering mixed signals on supply conditions.
In earlier analysis, we noted WTI’s vulnerability to both geopolitical tensions and inventory surprises. While macro headwinds remain, the tightening supply narrative driven by sanctions and coordinated cuts is reasserting short-term bullish pressure.
