Oil prices managed to close with modest gains on Friday, buoyed by fresh U.S. sanctions on Iran’s crude exports. However, the market remained on track for a third straight weekly decline as investor concerns over renewed trade tensions and tariff threats weighed heavily on sentiment.

Brent crude futures settled at $74.66 per barrel, rising 37 cents (0.5%), while U.S. West Texas Intermediate (WTI) climbed 39 cents (0.55%) to finish at $71.00 per barrel. Despite these gains, Brent was poised to drop over 2% for the week, reflecting broader market unease.

According to John Kilduff, a partner at Again Capital LLC, oil prices struggled to hold onto gains due to reports that the Trump administration was planning new tariffs.

Traders kept a close eye on President Trump’s statements throughout the day, wary of sudden policy shifts that could dramatically alter the market landscape. “Trump giveth and Trump taketh away,” remarked Phil Flynn, senior analyst at Price Futures Group, emphasizing the unpredictable nature of the administration’s approach to energy policy.

On Thursday, the U.S. Treasury introduced new sanctions targeting individuals and tankers involved in transporting millions of barrels of Iranian crude oil to China. While these measures signal a tightening of restrictions on Tehran, their impact was overshadowed by escalating concerns over global demand.

The potential for a deepening trade war remains a significant factor pressuring oil prices. Michael Haigh, global head of commodities research at Societe Generale, explained that while tariffs can introduce uncertainty—often bullish for commodities—this time, the fear of reduced demand is prevailing. “Tit-for-tat trade measures harm global GDP, which in turn dampens oil consumption,” he said.

Earlier in the week, President Trump announced a 10% tariff on Chinese imports, part of a broader strategy to address trade imbalances. However, he later backed away from imposing higher tariffs on Mexico and Canada. Despite this partial retreat, the uncertainty surrounding future trade policies continues to unsettle markets.

Adding to the bearish sentiment, oil prices dipped on Thursday after Trump reiterated his commitment to increasing U.S. crude production. The announcement came just a day after official data revealed a larger-than-expected surge in domestic crude inventories, further pressuring prices.

Analysts at BMI noted that concerns over weakening demand have been the primary driver of recent price declines. Tariff-related uncertainty has been a major downside factor, as fears of a prolonged trade dispute weigh on expectations for global oil consumption, they noted on Friday.

With geopolitical tensions, trade policies, and supply-side dynamics all in flux, oil markets remain on edge. As traders brace for further developments, the road ahead promises to be anything but predictable.