Iran Sanctions Threaten Oil Supplies as US Prepares 'Economic D-Day'
Oil prices dropped sharply on Monday after Iran allowed some Iraqi oil tankers to pass through the Strait of Hormuz. The move came after talks between Iran and Iraq, but the impact was short-lived as the US is set to impose stricter economic sanctions on Iran. These sanctions will likely disrupt Middle Eastern oil supplies, leading to higher prices.
The US Treasury Secretary Scott Bessent said that an 'economic D-Day' is coming for Iran, and President Donald Trump has warned of economic warfare against the country. Iranian officials have threatened neighboring countries in the Gulf not to cooperate with the US, and warned that no oil will be exported through Hormuz if the economic war continues.
The number of ships allowed to pass through Hormuz is not clear, but it marks a rare moment of traffic after the waterway was effectively blocked by Iran since February. The Strait of Hormuz supplies around 20% of the world's oil, and markets are positioning for more disruptions in the region.