Oil Prices Climb on Iran Sanctions and OPEC Output Cuts, Eye Weekly Gains

Oil prices rose Thursday, set for their first weekly gain in three weeks, as tighter supply concerns boosted sentiment. Brent crude climbed to $66.19 per barrel and WTI to $62.91, both reaching their highest levels since April 3. The gains followed new U.S. sanctions aimed at restricting Iran’s oil exports, including measures targeting a Chinese “teapot” refinery. In parallel, some OPEC members like Iraq and Kazakhstan pledged to deepen cuts after exceeding production quotas. Michael McCarthy of Moomoo noted that while Iranian output isn’t major, the sanctions and OPEC commitments added bullish momentum. U.S. data showing large draws in gasoline and distillate stocks, alongside smaller-than-expected crude builds, also supported prices. However, global growth concerns remain as major institutions like the IEA, OPEC, Goldman Sachs, and JP Morgan all downgraded oil demand forecasts. The WTO further added to the cautious outlook, projecting a 0.2% drop in global goods trade this year.

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U.S. Tightens Sanctions on Iran’s Oil Trade as Pressure Campaign Escalates

The U.S. has intensified sanctions on Iran’s oil trade, targeting tankers, companies, and maritime practices in a bid to enforce President Trump’s “maximum pressure” strategy. The Treasury Department blacklisted Chinese refinery Shandong Shengxing Chemical and five tankers, including VLCCs and aframaxes, linked to the transport of Iranian oil. These sanctions aim to disrupt Iran’s oil revenue, which Washington claims funds terrorism and nuclear programs. U.S. authorities warned refineries, brokers, and maritime firms of severe risks in engaging with Iranian oil. New guidance calls for shadow tankers to be barred from ports and stricter contract language to prevent sanctions evasion. Sanctioned vessels include the Bestla and Egret, among others, with their owners and managers also listed. OFAC emphasized stronger due diligence across the supply chain — including insurance, flag verification, and customer screening. The measures come amid parallel diplomatic efforts in Oman to revive talks on Iran’s nuclear program.

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China Turns to Canadian Crude Amid Sharp Drop in U.S. Oil Imports

China has drastically reduced its U.S. oil imports by 90%, pivoting to Canadian crude amid intensifying trade tensions with the United States. In March, Chinese refiners imported a record 7.3 million barrels of Canadian crude, a figure likely to be surpassed in April. This surge follows the completion of the Trans Mountain Pipeline expansion, which has enabled greater access to Alberta’s oil sands from British Columbia’s coast. Meanwhile, Chinese imports of U.S. oil have plummeted from a peak of 29 million barrels in June to just 3 million barrels a month. Experts cite the ongoing trade war, sparked by President Trump’s tariff policies, as a key driver of the shift. Canadian oil offers Chinese refiners a cheaper alternative to similar Middle Eastern grades like Iraq’s Basrah Heavy. The heavy, high-sulfur crude from Alberta suits China’s advanced refining capabilities. Analysts say China is diversifying its oil sources to reduce reliance on Russia and the Middle East amid global geopolitical shifts.

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China's March Refinery Throughput Hits One-Year High on Teapot and Yulong Output

China's oil refinery throughput in March reached a one-year high, rising 0.4% year-on-year to 14.85 million barrels per day (bpd), driven by increased activity at small independent "teapot" refiners and Shandong Yulong Petrochemical. First-quarter throughput rose 1.6% from the same period in 2024 to 182.25 million tons, or 14.78 million bpd. Despite this, revised data suggests last March's figures were adjusted lower, making year-over-year gains appear slightly overstated. The surge in Iranian oil imports, despite U.S. sanctions, contributed to the uptick, as teapots resumed increased processing after three months of decline. Yulong Petrochemical operated at 90% capacity and began testing a second crude unit in late March. Diesel demand showed minor improvement due to stronger-than-expected exports, though overall oil demand remains weak amid China’s slowing economy and a worsening tariff dispute with the U.S. China’s crude production rose 3.5% to 4.48 million bpd in March, the highest since mid-2011. Natural gas production also grew, up 5% year-on-year in March, with Q1 output reaching 66 billion cubic meters.

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Japan’s Crude Oil Imports Drop 13.6% in March Amid Energy Market Shifts

Japan's customs-cleared crude oil imports fell by 13.6% year-on-year in March, reaching 2.19 million barrels per day (10.777 million kilolitres), according to preliminary data from the Ministry of Finance. The decline reflects broader changes in Japan's energy mix and global market dynamics. Liquefied natural gas (LNG) imports also dropped 7.2% to 5.151 million tonnes, while thermal coal imports surged by 8.8% to 8.31 million tonnes. Despite lower volumes in some sectors, oil product imports saw a value increase of 17.8%. Gasoline and naphtha volumes rose 6.2%, although their value increased only 0.9%. Liquid petroleum gas (LPG) imports jumped 40.6% in volume and 43.9% in value. Overall mineral fuel imports were valued at ¥1.92 trillion, down 12.5% from the previous year. The shift suggests Japan is adapting its import strategy amid global price fluctuations and changing energy demands.

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Turkey’s Tupras Resumes Russian Urals Crude Imports as Prices Fall Below G7 Cap

Tupras, Turkey’s largest oil refiner, has resumed buying Russian Urals crude after halting purchases in February due to stronger U.S. sanctions. Sources say the decision followed a price dip in Urals crude below the G7-imposed $60 per barrel cap, which permits the use of Western maritime services. The G7, EU, and Australia restrict services for Russian oil sold above this threshold, with the U.S. ramping up enforcement since October. Tupras was previously a top importer of Russian oil, which made up 65% of Turkey’s total crude imports in early 2024. The company has at least two Urals cargoes scheduled for April, with one already en route to its Izmit refinery from Ust-Luga, Russia. The Nissos Christiana is delivering about 730,000 barrels, expected to arrive on April 21. During the suspension of Russian crude purchases, Tupras sourced oil from Brazil, Guyana, Nigeria, Libya, and Norway. The refiner operates two major facilities in Izmit and Izmir, with a combined capacity of 467,300 barrels per day.

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Torm Tanker Makes Historic First Diesel Export from Mexico’s New Olmeca Refinery

The Torm Singapore, a 50,000-dwt MR tanker, has completed the first-ever export shipment of ultra-low sulphur diesel (ULSD) from Mexico’s new Olmeca refinery in Dos Bocas. The vessel loaded 300,000 barrels in March and discharged the cargo in two parts—first in Seaport Canaveral, U.S., and then in Yabucoa, Puerto Rico. This shipment marks a significant milestone for Mexico’s strategy to reduce reliance on fuel imports and boost domestic refining. The $16.8 billion Olmeca plant, featuring two distillation units, is currently partially operational and is designed to process Maya crude. Once fully online, the refinery is expected to curb heavy crude exports to the U.S. and slash clean product imports, especially ULSD and gasoline. Torm’s involvement may signal rising demand for MR tankers in the region. Previously, the Ocean Royal, a supramax bulker, lifted the first export cargo from Olmeca — petroleum coke — in September. Despite President Claudia Sheinbaum’s plans to cap oil production and support renewables, Pemex’s operations at Olmeca will continue to receive backing.