Economy
Oil Prices up on Fears of Tighter Supply After Trump’s Iran Threat
By Adedapo Adesanya
Oil prices were up on Friday after US President Donald Trump threatened economic sanctions on Iran’s trading partners, raising expectations of tighter supply in the coming weeks.
The international benchmark Brent crude futures settled at $94.39 a barrel, up 61 cents or 0.65 per cent, while the US West Texas Intermediate (WTI) crude traded at $87.06 a barrel, up 23 cents or 0.26 per cent.
The Brent benchmark has gained 6.39 per cent while WTI has risen 5.66 per cent this week, their highest since July 24 in the previous session.
US President Trump threatened sweeping penalties and ‘tremendous consequences’ against countries trading with Iran, putting China and its imports of Iranian oil in the crosshairs as the White House announced the start of ‘economic warfare’ against Iran.
The earlier peace deal between the US and Iran expired this week with no effort by either side to restart talks.
Iran said on Friday that its response to any new American threats would be “devastating” after the US pledged to impose the toughest financial penalties in history to topple the Iranian leadership.
It warned Gulf states that any support for US military operations will make them participants in the war, as the United Arab Emirates (UAE) cuts economic ties with Iran.
Reuters reported that offers of Iranian crude to Chinese buyers have declined and prices have jumped this week as the US blockade cuts Iran’s shipments, with the threat of more sanctions from the US looming.
Oil prices have climbed on concerns over the continued curtailment of supply from major oil producers such as Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.
The Strait of Hormuz is still operating far below normal, as latest data showed that seven commodity ships sailed along the waterway, which was only half the previous day’s tally.
Before the US-Israeli attacks on Iran began in late February, the Strait of Hormuz handled about a fifth of global oil and liquefied natural gas supplies. As the war approaches the six-month mark, disruptions to energy flows through the waterway remain in place.
