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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. (Reporting by Shariq Khan in New York and Enes Tunagur in London Editing by David Goodman, Susan Fenton and David Gregorio)