Sanctions Risk Keeps Oil Price Volatile Amid Hormuz Traffic Concerns
The recent drop in oil prices has not eliminated the risk of a move towards $94 per barrel, according to Exchange Rates UK. The Crude Oil price in US Dollars (OIL/USD) fell back towards $81 after a violent swing in the Middle East risk premium.
The underlying sanctions story has not disappeared, with the US Treasury launching a wider campaign against Iran and its overseas trading network. Secretary Scott Bessent warned that Washington intends to sever Iran's economic links around the world.
Raymond James analyst Pavel Molchanov said there was “not much new” in Bessent's announcement beyond what the market had already expected, which helps explain the immediate sell-off. However, the physical market looks less relaxed than the price action suggests.