Oil prices eased slightly but held near one-month highs on Friday as they headed for a third weekly gain as the outlook for global supplies tightened after the U.S. imposed tariffs on countries buying Venezuelan oil and restricted trade in Iranian oil.

Brent crude futures fell 14 cents, or 0.2%, to $73.89 a barrel. U.S. West Texas Intermediate crude futures fell 12 cents, or 0.2%, to $69.80 a barrel by 0431 GMT.

The moves were small compared with gains of more than 2% for both contracts so far this week. Oil prices have risen more than 7% since hitting multi-month lows in early March.

The main driver of the price gains is the changing global oil sanctions landscape, BMI analysts wrote in a market commentary. U.S. President Donald Trump on Monday announced new tariffs of 25% on potential buyers of Venezuelan crude, days after U.S. sanctions targeted Chinese imports from Iran.

The order adds new uncertainty for buyers and has halted Venezuelan oil trade to top buyer China. Elsewhere, sources said India's Reliance Industries (RELI.NS), operator of the world's largest oil refining complex, would stop importing Venezuelan oil. "The potential loss of Venezuelan crude exports to the market due to secondary tariffs and the possibility of similar tariffs being imposed on Iranian barrels has led to tighter crude supplies," said June Goh, senior oil analyst at Sparta Commodities. Oil was also supported by signs of better demand in the US, the world's biggest oil consumer, as the country's crude stockpiles fell more than anticipated. Data from the Energy Information Administration showed US crude inventories fell by 3.3 million barrels to 433.6 million barrels in the week to March 21, compared with analysts' expectations in a Reuters poll for a draw of 956,000 barrels.

The broader global dynamics for oil trade, however, point to a period of heightened uncertainty, as US tariffs on trading partners raise concerns of a sharp economic downturn that would hurt oil demand. As a result, analysts do not expect the sharp rise in oil prices to be sustainable in the current environment.

"While the market is suffering under extreme uncertainty, we maintain our forecast for Brent crude to average $76 per barrel in 2025, down from $80 per barrel in 2024," BMI analysts wrote. (Newsmaker23)

Source: Reuters