Oil headed for a fourth straight weekly gain as US sanctions posed growing risks to global supply in a market already tightened by cold weather.
Brent crude traded marginally lower near $81 a barrel, and is up more than 1% for the week. President-Elect Donald Trump’s advisers are crafting a sanctions strategy to enable a Russia-Ukraine accord, while squeezing Iran and Venezuela, people familiar with the matter said.
Scott Bessent, Trump’s nominee for Treasury secretary, said he would support dialing up measures targeting the Russian oil industry.
Crude has rallied strongly since the year began, as cold weather in the Northern Hemisphere winter pushes up heating demand and depletes US crude stockpiles to seasonal lows.
Markets have been further shaken up in the week since the Biden administration announced its harshest ever curbs on Russian oil, with freight costs rocketing and long-standing buyers of Russian crude including China and India looking elsewhere for supplies.
Trump, who will be sworn in on Monday, has also threatened to slap tariffs on Canada, including its oil. While Ottawa is pushing back, the leader of its largest oil-producing province is resisting such efforts.
“Mounting supply risks continue to provide broad support to oil prices,” said Warren Patterson, head of commodities strategy at ING Groep NV.
Physical markets have also strengthened. The gap between Brent’s two nearest contracts, known as the prompt spread, has widened in a sign of tighter conditions. The premium on the closest delivery was at $1.32 a barrel, about $1 higher than a month before. In the Middle East, grades including Murban and Oman have soared relative to benchmarks.
China’s economy hit the government’s growth goal last year after an 11th hour stimulus blitz and export boom turbocharged activity, offering additional support to crude prices on Friday. Still, looming US tariffs threaten to take away a key driver of expansion.
