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Benchmarks record highest weekly gains since early January

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Fresh US sanctions on Iran include Chinese independent

refiner

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Prices also supported by latest OPEC+ production plans

(Updates with settlement prices, adds analyst comment)

By Shariq Khan

NEW YORK, March 21 (Reuters) - Oil prices settled higher

on Friday and recorded a second consecutive weekly gain as fresh

U.S. sanctions on Iran and the latest output plan from the OPEC+

producer group raised expectations of tighter supply.

Brent crude futures rose 16 cents, or 0.2%, to

settle at $72.16 a barrel. U.S. West Texas Intermediate crude

futures rose 21 cents, or 0.3%, to $68.28.

On a weekly basis, Brent rose 2.1% and WTI about 1.6%,

their biggest gains since the first week of the year.

On Thursday, the U.S. Treasury 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.

That probably sent a message to the market that Chinese

companies, the largest buyers of Iranian oil, are not immune to

sanctions pressure from the U.S., said Scott Shelton, energy

analyst at TP ICAP.

It was Washington's fourth round of sanctions against Tehran

since President Donald Trump in February promised "maximum

pressure" and pledged to drive Iran's oil exports down to zero.

The tightening U.S. sanctions regime will probably keep some

market participants involved in shipping Iranian crude more

cautious going forward, UBS analyst Giovanni Staunovo said.

Analysts at ANZ Bank said they expect a 1 million barrels

per day (bpd) reduction in Iranian crude oil exports because of

tighter sanctions. Vessel tracking service Kpler estimated

Iranian crude oil exports above 1.8 million bpd in February.

Oil prices were also supported by the new OPEC+ plan for

seven members to cut output further to compensate for producing

more than agreed levels. The plan would represent monthly cuts

of between 189,000 bpd and 435,000 bpd until June 2026.

The plan likely caps the upside in OPEC+ production over the

coming months, UBS's Staunovo said.

OPEC+ 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.

Oil market participants will want more proof of Iraq,

Kazakhstan and Russia complying with cuts announced on Thursday

to gain more support from the plan, StoneX oil analyst Alex

Hodes said.

Kazakhstan's oil output has reached a record high in March

on the back of oilfield expansion, further exceeding OPEC+

production quotas, two industry sources told Reuters.