Oil Edges Closer to $94 Amid Looming U.S. Sanctions on Iran
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Oil prices are on track for a weekly gain as the market awaits details of a new U.S. economic campaign against Iran, amid an ongoing conflict that has severely disrupted Middle East energy exports.
U.S. Treasury Secretary Scott Bessent announced that details of the initiative—which President Donald Trump termed an “economic D-day”—will be released on Monday. The upcoming measures will target Tehran and may also impact nations trading with Iran, including China.
Global benchmark Brent crude hovered near $94 a barrel, heading for a weekly rise of approximately 6%, while West Texas Intermediate neared $87 a barrel following five straight days of gains.
Crude prices have surged over 50% this year due to the U.S.-Iran conflict, which has threatened energy flows through the vital Strait of Hormuz. While Bessent asserted that the U.S. controls the waterway and maintains a safe southern transit lane, Tehran continues to claim authority over the strait, where more vessel attacks were reported this week.
Despite months of U.S. naval blockades and military strikes, analysts question the efficacy of further economic pressure. Arne Lohmann Rasmussen, chief analyst at AS Global Risk Management, noted that the market expects Iran to resist the new measures, potentially prolonging the crisis.
China, the primary buyer of Iranian crude, has rejected the use of sanctions and urged a diplomatic solution. While Bessent suggested that cooperating with the U.S. initiative would benefit China’s energy security, Josh Lipsky of the Atlantic Council warned that escalation could trigger significant blowback from Beijing.
Prices briefly dipped from their daily highs after Iranian President Masoud Pezeshkian, a proponent of diplomatic resolution, suggested that Iran should seek an end to the conflict from a position of strength.
Meanwhile, global energy markets face further supply constraints from Russia, where Ukrainian strikes on refineries and ports have disrupted diesel markets. In the U.S., average retail diesel prices climbed past $5.55 a gallon—the highest since May—while the refining margin for diesel reached a record high of over $100 a barrel. A weakening U.S. dollar has also provided upward support for greenback-denominated commodities.
