NEW YORK/SINGAPORE: Oil prices rose on Friday, and were set for second consecutive weekly gains, as fresh US sanctions on Iran and a new plan from OPEC+ to cut output raised bets on tighter supply.

Brent crude futures climbed 14 cents, or 0.2 percent, to $72.14 per barrel by 9:42 a.m. Saudi time. US West Texas Intermediate crude futures were up 16 cents, also 0.2 percent, to $68.23 a barrel.

On a weekly basis, both Brent and WTI were on track to rise about 2 percent, their biggest weekly gains since the first week of 2025.

The US Treasury on Thursday announced new Iran-related sanctions, which for the first time targeted an independent Chinese refiner among other entities and vessels involved in supplying Iranian crude oil to China.

The sanctions on Chinese entities were “a clear escalation in sanctions policy,” analysts at RBC Capital Markets said in a note on Friday.

“While the physical implications are minimal, we think it reasonable that risk premium here is taken more seriously,” they wrote.

That marked Washington’s fourth round of sanctions against Iran since US President Donald Trump in February promised to reimpose a “maximum pressure” campaign on Tehran, pledging to drive the country’s oil exports to zero.

Analysts at ANZ Bank said they expect a 1 million barrels per day reduction in Iranian crude oil exports because of tighter sanctions. Vessel tracking service Kpler pegged Iranian crude oil exports at over 1.8 million bpd in February.

Oil prices were also supported by a new OPEC+ plan announced Thursday for seven members to further cut output to make up for producing more than agreed levels. The plan would represent monthly cuts of between 189,000 bpd and 435,000 bpd, and will last until June 2026.

OPEC+ earlier this month confirmed that eight of its members would proceed with a monthly increase of 138,000 bpd from April, reversing some of the 5.85 million bpd of output cuts agreed in a series of steps since 2022 to support the market.

“While the group shares a plan for compensation cuts, it certainly doesn’t mean members will follow it. A handful of members have consistently produced above their target production levels,” ING analysts said in a note on Friday. 

JEDDAH: Saudi Aramco has unveiled the Kingdom’s first direct air capture test unit, marking a significant milestone in its mission to reduce emissions and advance carbon capture technology for a sustainable future.

The unit is capable of removing 12 tonnes of carbon dioxide from the atmosphere each year, according to an official statement from Aramco.

As the world’s leading integrated energy and chemicals company, Aramco emphasized that the pilot plant, developed in partnership with Siemens Energy, represents a crucial step in enhancing DAC capabilities.

Ali A. Al-Meshari, Aramco’s senior vice president of technology oversight and coordination, highlighted that direct carbon dioxide capture technologies will play a pivotal role in mitigating greenhouse gas emissions, particularly in industries that are difficult to decarbonize.

“The test facility launched by Aramco is a key step in our efforts to scale up viable DAC systems, for deployment in the Kingdom of Saudi Arabia and beyond. In addition to helping address emissions, the CO2 extracted through this process can in turn be used to produce more sustainable chemicals and fuels.” Al-Meshari said.

The development is in line with Saudi Arabia’s commitment to achieving net-zero emissions by 2060, following a circular carbon economy approach that emphasizes reducing, reusing, recycling, and removing carbon.

This initiative also supports the Saudi Green Initiative, which aims to reduce carbon emissions by 278 million tonnes annually by 2030 and transition 50 percent of the country’s energy sources to renewables.

The project reflects Aramco’s strong commitment to carbon capture, a critical component of its goal to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned and operated assets by 2050.

Aramco plans to use the new facility as a testing ground for next-generation CO2 capture materials specifically designed for Saudi Arabia’s unique climate. Additionally, the company aims to drive down costs, promoting the quicker adoption of DAC technologies in the region.

As part of its circular carbon economy strategy, Aramco is exploring methods for capturing CO2 both at emission sources and directly from the atmosphere, incorporating cutting-edge technological solutions, as stated in the company’s announcement.

In partnership with Siemens Energy, Aramco intends to scale up the technology and lay the groundwork for large-scale DAC facilities in the future.

Furthermore, the DAC test facility launch comes shortly after Aramco, along with its partners Linde and SLB, signed a shareholders’ agreement to develop a carbon capture and storage hub in Jubail. Phase one of the hub will have the capacity to capture 9 million tonnes of CO2 from three Aramco gas plants and other industrial sources.

In October 2023, Saudi Aramco announced its collaboration with major international companies to develop emissions reduction solutions, including lower-carbon hydrogen, direct air capture of CO2, and an innovative approach to CO2 storage.