Oil Prices Set For 5% Weekly Gain As Fresh US Iran Measures Raise Supply Disruption Fears

Oil prices are set for a 5% weekly increase as the United States prepares to announce new sanctions against Iran, heightening fears of further supply disruptions in the global energy market. Brent crude traded above $93 a barrel on Friday, with WTI for October delivery edging closer to $86 a barrel, on track for a fifth consecutive weekly gain.

US Treasury Secretary Scott Bessent announced that the fresh measures would be unveiled on Monday, following President Donald Trump's description of the action as an "economic D-day."

The looming sanctions are expected to target Iran and may also impact countries engaged in trade with Tehran, including China. Oil prices have surged more than 50% this year due to the ongoing US-Iran conflict and its implications for energy supplies across the Middle East. The situation has raised particular concerns about the Strait of Hormuz, a vital conduit for global oil and gas trade. Bessent stated that Washington controls the waterway, and vessels could utilize a southern route to exit the region.

Iranian oil exports are facing mounting pressure. China, the world's largest importer of Iranian crude, has criticized Washington's approach, arguing that sanctions and economic pressure will not resolve the conflict and advocating for negotiations. The US has imposed a naval blockade around Iranian ports, while Iranian Central Bank Governor Abdolnaser Hemmati reported that the country's oil flows have "virtually stopped."

The potential for additional restrictions on Iranian exports or disruptions to shipping through Hormuz could exacerbate pressure on global fuel markets. Faced with existing supply constraints, investors are closely monitoring the US-Iran tensions for indications of further escalation and its possible effects on crude and fuel prices.