Crude oil prices were on course to book another weekly loss despite no sign of any progress being made towards peace between Iran and the United States.
At the time of writing, Brent crude was trading at $89.17 per barrel, with West Texas Intermediate at $83.19 per barrel. Brent was down by 5.3% over the week, and WTI was set for a 4.3% decline, Reuters reported earlier today.
The price trend is interesting in light of reports from vessel-tracking companies that tanker traffic in the Strait of Hormuz remains much weaker than it was before the war. The price dip also came despite the U.S. Treasury announcing what it described as the “toughest sanctions in history” to force Iran to reopen the Strait of Hormuz.
In further news that should have been bullish for oil but hasn’t, the Wall Street Journal reported earlier this week that the Trump administration had repeatedly told mediator parties it had no interest in returning to the terms of the ceasefire that the U.S. and Iran agreed in June. The deal did not last a month.
According to the report, the Trump administration and the president himself appear focused on economic pressure. “As the president said, there are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran,” White House spokeswoman Anna Kelly said, as quoted by the Wall Street Journal. “The naval blockade remains in full force and effect, and Operation Economic Outcast is underway to sever every remaining economic lifeline sustaining the regime.”
The effectiveness of Operation Economic Outcast has been called into question by some observers, seeing as China’s cooperation is key because of its status as Iran’s biggest trade partner. China, however, is not exactly cooperating. In fact, China has repeatedly stated sanctions are not the most productive way of effecting political change.
By Irina Slav for Oilprice.com
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