Crude oil prices increase as U.S. sanctions on Iran raise supply risks in the global commodities market ahead of the Federal Reserve’s potential rate cut. Uncertainties in the commodity market remain elevated over US President Donald Trump’s trade policies, though plans to resume Iraqi oil exports and hopes for Russia-Ukraine peace capped price increases.

Brent crude increased by 1.7%, trading at $74.60 per barrel, up from $73.32 at the close of the previous session. The US benchmark West Texas Intermediate (WTI) increased by 0.4%, reaching $71 per barrel, compared to its prior session close of $70.72.

The US administration announced sanctions on more than 30 individuals and vessels facilitating Iran’s oil sales. The sanctions were imposed as part of a ‘maximum pressure’ campaign against Iran’s shadow fleet.

The US will use all available tools to target all aspects of Iran’s oil supply chain, and anyone who deals in Iranian oil exposes themselves to significant sanctions risk, US Treasury Secretary Scott Bessent said in a statement. Moreover, the uncertainty created by Trump’s protectionist trade policies in the global economy increased the risk perception in oil markets.

Experts say Trump’s statement that tariffs on Canada and Mexico are ‘on time and on schedule’ has fueled trade war concerns. Investors are awaiting the personal consumption expenditures data to be announced on Friday in the US, the world’s largest oil consuming country.

This data is expected to give clues about the timing of the US Federal Reserve’s interest rate cuts. The Fed is forecast to implement its first interest rate cut in June. Experts say that lower interest rates combined with the weakening dollar and increasing economic activity could push oil prices even higher.

Meanwhile, the Iraqi Oil Ministry announced on Sunday that an agreement had been reached with Iraq to restart the export of oil produced in the Iraqi Kurdistan Regional Government (KRG) through Ceyhan Port.

Iraqi Oil Minister Hayyan Abdulghani stated that the pipeline is ready and they hope to resume exports within the next two days. Iraqi Deputy Oil Minister Basim Mohammed Khudhair said that in the first phase, 185,000 barrels of oil per day are planned for export, with the volume gradually increasing to 400,000 barrels.

Resumed Iraqi oil exports via Ceyhan Port could ease supply concerns and put downward pressure on oil prices, according to experts. In addition, expectations that the Russia-Ukraine war could end with a peace deal is another factor limiting the rise in oil prices.

Speaking at the Conservative Political Action Conference in Washington, Trump said, ‘It’s a ridiculous war, and it has to end. We had a good talk with President Putin.