Oil prices were largely steady during early Asian trading on Thursday after U.S. President Donald Trump announced plans for tougher economic restrictions on Iran.
Crude markets remained supported by ongoing tensions surrounding the Strait of Hormuz, where the standoff continues to disrupt global energy flows.
Oil prices have now posted gains for five consecutive sessions and are trading close to their highest levels in about a month.
Brent and WTI Crude Edge Higher
Brent crude futures rose around 0.25% to $91.85 per barrel, while West Texas Intermediate crude gained approximately 0.15% to $84.52 per barrel.
The relatively modest price moves suggest that markets are still assessing the potential impact of new U.S. restrictions against Iran.
However, continued uncertainty around Hormuz is keeping a risk premium in crude oil prices.
Trump Threatens Tougher Economic Restrictions on Iran
Trump said Washington intends to impose additional and stricter economic measures against Iran as tensions between the two countries remain elevated.
The U.S. president did not provide specific details about the new restrictions. However, he urged American allies to support the effort and warned countries against continuing business ties with Iran.
Trump described the proposed measures as an extremely aggressive economic campaign aimed at increasing pressure on Tehran.
Iran Already Faces Strict Oil Sanctions
Iran is already subject to extensive U.S. sanctions on its oil exports.
Washington has also imposed a naval blockade on the country amid the ongoing conflict, further restricting Iran’s ability to participate in global energy markets.
The possibility of additional sanctions has increased concerns that Iranian oil supply could face even greater disruption.
Any significant reduction in crude exports from Iran could tighten global supply and place additional upward pressure on oil prices.
Strait of Hormuz Remains a Major Risk for Oil Markets
The Strait of Hormuz continues to be one of the most important factors influencing crude oil prices.
Iran has effectively restricted access to the key shipping route for much of the year in response to U.S. military action.
The waterway is strategically important because approximately 20% of global crude oil supplies normally pass through the Strait of Hormuz.
Any prolonged disruption can therefore have significant consequences for global oil supply, shipping costs, and energy prices.
Shipping Through Hormuz Remains Limited
Recent shipping data indicated that commercial traffic through the Strait remains well below pre-war levels.
This is despite repeated statements from U.S. officials that the waterway remains open.
The limited shipping activity has increased expectations that the standoff could continue for an extended period.
As long as tanker traffic remains restricted, traders are likely to maintain a geopolitical risk premium in Brent and WTI crude prices.
U.S. Says It Controls the Strait of Hormuz
Trump reiterated on Wednesday that the United States maintains full control over the Strait of Hormuz.
He also suggested that negotiations between Washington and Tehran could resume at some point.
However, Iran has largely rejected claims that meaningful dialogue with the United States has taken place.
Tehran has insisted that Washington must first meet the terms outlined in a previous memorandum of understanding before progress regarding the Strait can occur.
Iran-U.S. Agreement Expires Without Progress
The memorandum of understanding signed in June expired earlier this week.
There have been few indications that either Iran or the United States is preparing to renew the agreement.
The absence of progress has reinforced concerns that the disruption to shipping through Hormuz could persist.
A prolonged standoff would increase uncertainty surrounding global oil supplies and could keep crude prices elevated.
Oil Market Outlook Remains Tied to Iran Tensions
The near-term outlook for oil prices will likely depend heavily on developments involving Iran, U.S. sanctions, and the Strait of Hormuz.
Additional economic restrictions could further limit Iranian crude exports, while continued disruptions to shipping could tighten global supply.
For now, Brent and WTI remain close to one-month highs as traders monitor geopolitical developments and any signs of renewed negotiations between Washington and Tehran.
