Trump Sanctions Threat Boost Oil Prices Amid Ongoing Supply Disruptions

Oil prices surged on Friday after US President Donald Trump vowed to impose sanctions on Iran's trading partners, sparking concerns of tighter supply in the coming weeks.

The international benchmark Brent crude futures rose by 61 cents or 0.65% to settle at $94.39 a barrel, while US West Texas Intermediate crude CLc1 settled at $87.06 a barrel, up 23 cents or 0.26%.

According to John Kilduff, partner with Again Capital, sanctions have been the only thing to bring Iran to heel, implying that Trump's threats may be effective in curbing Iran's oil exports.

However, some analysts caution that the immediate impact on supply may be limited due to existing constraints on Iranian exports. Crispus Nyaga, research analyst at Empire FX, noted that Iranian exports are already heavily constrained by the US naval blockade, and any increase in shipping incidents or retaliation against economic sanctions could exacerbate the situation.

Phil Flynn, senior analyst with Price Futures Group, disagreed, saying that workarounds and alternative supplies are being found while Hormuz remains constrained. He noted that pipelines, shuttles, US shale, a recovering Venezuela, and an unconstrained UAE are all adding barrels to global supply.