(Bloomberg) -- Oil rose the most in more than two weeks as the US imposed more sanctions targeting Iranian crude and OPEC+ made progress on a deal to keep output off the market.
West Texas Intermediate advanced 2.7% to settle near $70 a barrel, the biggest one-day jump since Nov. 18, as OPEC+ delegates said the group is firming up an agreement to delay its oil-production revival by another three months. The alliance is due to finalize plans at an online meeting on Thursday. Brent climbed to settle above $73 a barrel.
Crude extended gains after the US Treasury sanctioned 35 entities and vessels for their role in transporting illicit Iranian oil to foreign markets. A possible return to President-elect Donald Trump’s hawkish sanctions on Iran could threaten the nation’s output, which has increased by about 1.2 million barrels a day since he left office.
“Much of the future of oil hinges on sanctions on Iran and Venezuela, and of course OPEC,” Francisco Blanch, head of commodities research at Bank of America, said during a media roundtable. If the two countries’ output declines, Brent could rise as high as the $80-per-barrel range, Blanch said.
In another sign of potential risk to Middle East flows, Israel attacked and killed Hezbollah’s liaison to the Syrian army, the Israel Defense Forces said. The civil war in Syria, an ally of Iran that borders key oil-producing nation Iraq, is flaring up after rebel forces captured the city of Aleppo this weekend.
In Asia, China’s top leaders plan to map out economic targets and stimulus for 2025 at a major gathering next week, potentially supporting demand for crude.
Still, gauges of implied volatility for oil have sunk to the lowest in about two months as futures remain stuck in a range of about $6 since mid-October.
In Brazil, one of the main engines of non-OPEC supply growth, output continued to falter. Oil production was down about 6% from a month earlier and 8% on a year earlier, according to data from the nation’s oil regulator.
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--With assistance from Alex Longley.
