Trump's Iran Sanctions Intensify, But Pakistani Mediation Hopes Lift Oil Prices

The US sanctions pressure on Iran has intensified as the Trump administration imposed new 'Economic D-Day' measures, threatening to sanction all commercial partners of Tehran. However, the prospect of a negotiated settlement, facilitated by Pakistan's mediation efforts, has pushed Brent prices back to $89 per barrel.

The US Navy's maritime blockade in the Gulf of Oman has significantly reduced Iran's crude exports, averaging only 0.3 million b/d in August compared to the 2025 average of 1.7 million b/d. Chinese imports of Iranian barrels are slightly above Tehran's pace of loading, around 800,000 b/d, but are set to decline further next month.

Iranian floating storage outside of the Gulf has shrunk to just 24 million barrels, down 7 million barrels since the beginning of August. If the US maritime blockade continues, China could run out of Iranian options by October, reflected in soaring Iranian differentials as Iran Light is now traded at a $4 per barrel premium to ICE Brent.