Oil rose for a second day after the Trump administration again vowed to reduce Iran's energy exports to zero, while talks between the US and Japan stirred optimism that agreements on trade can be reached.

Brent crude climbed above $66 a barrel after advancing almost 2% on Wednesday, putting futures on track for their first weekly gain this month.

Treasury Secretary Scott Bessent said the US would apply maximum pressure to disrupt Iran's oil supply chain, as his department sanctioned a second Chinese refinery accused of handling crude from the Islamic Republic.

The so-called teapot oil processor sanctioned by the US — Shandong Shengxing Chemical Co. — had allegedly handled more than $1 billion of Iranian crude, the Treasury Department said.

Tehran, meanwhile, warned that nuclear talks with Washington may fall apart if the Trump administration "moves the goalposts."

The renewed focus on Iran came after signs that China may be willing to engage in talks with the US in a bid to ease the escalating trade war. Equities also rallied Thursday on speculation that positive negotiations between the US and Japan indicated deals can be struck to avoid the worst impacts of tariffs.

The pressure of Trump's sweeping trade measures has put crude on the back foot this month, with prices at one point trading almost 30% lower than their high for the year.

"As has been the case for the last month, as friendly as oil drivers might be, they will always be undone by the carnage caused by the global trade flux," said John Evans, an analyst at brokerage PVM.

This week's rebound was aided by US government data that showed inventory levels at Cushing, Oklahoma — the delivery point for West Texas Intermediate — at their lowest for this time of year since 2008. That's helping support nearby timespreads. Brent's prompt spread hit the strongest since January on Wednesday.

Oil futures won't trade on Friday, a holiday in many countries.

Source: Bloomberg