Oil prices remained near their highest level in more than three weeks on Friday as the deadlock over the Strait of Hormuz and a sharp escalation in US economic pressure on Iran raised fresh concerns about global energy supplies.
Brent crude was trading at about $93.55 a barrel on Friday, down 0.3% in early trading, while US West Texas Intermediate (WTI) was around $86.50. Brent had settled at $93.78 on Thursday, its highest level since July 24, after rising 2.4%. WTI settled at $87.83, also its highest since July 24.
Brent is now up more than 7% over the past five days and is on course for a second consecutive weekly gain as the prolonged US-Iran conflict continues to disrupt oil flows from the Middle East.
The latest price surge came after US Treasury Secretary Scott Bessent said Washington would impose what he described as the “toughest sanctions in history” on Iran, signalling a major expansion of the economic campaign against Tehran.
Bessent said the new measures, details of which are expected to be announced next week, could reduce the need for further major military operations. His comments followed President Donald Trump’s warning that the US would launch an “Economic Warfare” campaign against Iran and impose consequences on countries providing Tehran with “any type of lifeline”.
The prospect of tougher sanctions has added another layer of uncertainty to an already severely disrupted oil market. The Strait of Hormuz remains effectively constrained, with shipping activity at only a fraction of normal levels.
Only seven commodity ships transited the waterway on Thursday, according to ship-tracking data from Kpler, compared with 14 the previous day. Four vessels entered the strait and three exited, while no very large crude carriers or LNG tankers were recorded among the traffic. Before the conflict, the waterway carried nearly 20% of global crude oil and LNG shipments.
The restricted traffic has become a key factor behind the oil market's renewed risk premium. Traders are closely watching whether the US economic offensive succeeds in forcing Iran to reopen the waterway or instead triggers further confrontation and disruption.
Delicate dance
US Vice President JD Vance said economic pressure remained Washington's “most effective tool” against Iran but acknowledged that managing the pressure while protecting American consumers from higher fuel prices was a “delicate dance”.
Vance said the US wanted to increase the flow of oil and gas sufficiently to provide Americans with “some ease at the pump” while imposing economic costs on Iran for attacks on commercial shipping.
The ultimate US objective, he said, was to establish a “changed reality” in which Washington could be confident that Iran would not rebuild its nuclear capabilities.
Unlawful says Iran
Iran, meanwhile, has rejected the new US strategy as unlawful.
Iran's Foreign Ministry said Trump's threat of intensified economic warfare was “the other side of the coin of war and military aggression” and warned that those ordering or implementing the sanctions could face prosecution and punishment. Tehran said the US government would bear responsibility for the consequences of what it called an unlawful policy.
The confrontation is also continuing to have a military dimension. The USS George Washington aircraft carrier has arrived in the Middle East to relieve the USS Abraham Lincoln, which is returning home after an exceptionally long deployment. The Lincoln had been at sea for more than 250 days, with its extended deployment prompting concerns from military families and lawmakers about crew welfare and morale.
