Oil prices moved lower during Asian trading on Friday, pulling back slightly from one-month highs after the United States announced plans to impose its toughest economic sanctions yet on Iran.
Despite the decline, crude oil remained on track for a second consecutive week of strong gains. Persistent tensions between the U.S. and Iran, particularly around the Strait of Hormuz, continued to support prices.
Brent crude futures slipped 0.2% to $93.58 per barrel, while West Texas Intermediate crude futures fell 0.3% to $84.57 per barrel.
Brent Crude Heads for Strong Weekly Gain
Brent crude was on course to rise by more than 5% for the week, marking its second straight weekly advance.
Oil prices have been supported by growing concerns over supply disruptions in the Middle East.
The latest rally followed comments from U.S. President Donald Trump, who pledged to impose stricter economic sanctions on Iran in an effort to pressure Tehran into accepting a nuclear agreement.
Trump also warned countries that continue supporting Iran that they could face serious economic consequences.
U.S. Threatens Tougher Sanctions on Iran
U.S. Treasury Secretary Scott Bessent reinforced the administration’s position on Thursday, saying Iran would face what he described as the toughest sanctions imposed to date.
However, Iran largely dismissed the latest threats.
China, which remains a major buyer of Iranian crude oil, also showed little indication that it would change its position in response to Washington’s warnings.
The exact scope of the new sanctions remains unclear, especially because the United States already maintains significant restrictions on Iranian oil exports.
Strait of Hormuz Remains a Major Oil Market Risk
The U.S. has also maintained its naval blockade against Iran, keeping tensions elevated around the Strait of Hormuz.
The waterway is one of the world’s most important energy transport routes and remains a major focus for global oil markets.
Continued disruption in the region has increased concerns that Middle Eastern oil supplies could remain constrained.
Shipping Traffic Remains Below Pre-War Levels
Shipping data indicated that commercial traffic through the Strait of Hormuz remained significantly below levels recorded before the conflict.
This contrasts with U.S. claims that traffic conditions through the strategic waterway were improving.
Iran has indicated that it plans to keep the Strait restricted until the United States complies with the terms of a preliminary peace agreement signed in June.
U.S.-Iran Tensions Continue to Support Oil Prices
The latest comments from Washington suggest that relations between the U.S. and Iran remain strained, with little evidence of a near-term resolution.
As a result, traders continue to price in the risk of prolonged disruptions to Middle Eastern energy supplies.
Although oil prices eased on Friday, geopolitical uncertainty surrounding Iran, sanctions and the Strait of Hormuz could continue to provide support for crude.
For now, markets are likely to remain focused on any new sanctions, developments in shipping activity and signs of progress or deterioration in U.S.-Iran relations.
