Crude oil prices were on course to book a second consecutive weekly gain as the prospects of peace in the Middle East dimmed further amid U.S. threats of the “toughest sanctions in history” against Iran and continued Ukrainian drone attacks on Russian refineries.
At the time of writing, Brent crude was trading at $93.50 per barrel, and West Texas Intermediate was trading at $86.43 per barrel.
The price climb followed a Wednesday social media statement by President Trump that the U.S. is preparing “Economic Warfare and Isolation on an unprecedented scale” against Iran, and a Thursday statement by Treasury Secretary Scott Bessent that “It is a one-two punch. We have the blockade (on Iran), and we are going to have the toughest sanctions in history.”
“It is going to work in Iran and we are going to collapse this regime. It is time for our allies and the rest of the world to make a decision,” Bessent added, as quoted by Reuters. Details of the economic pressure campaign are set to be revealed on Monday, with Reuters reporting the United States will seek support for the campaign from China.
It is questionable whether China would provide such support, seeing as it is the largest buyer of already sanctioned Iranian crude and that Beijing has repeatedly stated that sanctions are not an effective tool for solving geopolitical problems, either in the Middle East or the Ukraine.
“Both sides are dug in but lacking the luxury of time to play the waiting game, against a backdrop of crude prices grinding unerringly higher,” IG analyst Tony Sycamore said earlier today, as quoted by Reuters.
At the same time, BMI and Fitch Ratings both said they would be revising their oil price outlook, noting strong upside potential in international benchmarks driven by the latest developments in the Persian Gulf war.
By Irina Slav for Oilprice.com
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