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Oil prices firmed on Tuesday as markets digested fresh US sanctions targeting Iranian energy networks, temporarily diverting attention from diplomatic progress between Washington and Tehran over nuclear negotiations. Also shaping supply-side expectations, market sources hinted at a larger-than-expected draw in US crude inventories in the week ending 18 April.

Brent crude futures settled $1.18 higher at $67.44 per barrel, up 1.8% on the day.

WTI for May delivery—which expired at settlement—rose $1.23, or 2%, to $64.32, while the more liquid June contract added 2% to close at $63.47.

Sanctions intensified after the US government imposed fresh restrictions on an Iranian shipping operator involved in LPG and crude transport, along with affiliated companies. While indirect talks between the two countries had shown signs of progress, the absence of a confirmed agreement left room for export restrictions to remain in place or even escalate.

Further shaping sentiment, American Petroleum Institute data released Tuesday claimed a 4.6 million-barrel draw in US crude inventories last week—which, if confirmed, surpassed analysts’ expectations for a modest 800,000-barrel decline. Official data from the US Energy Information Administration was due on Wednesday.

Written by: Derek Yong