Trump's Iran Sanctions U-Turn Sends Oil Prices Soaring

Crude oil prices have ticked higher after reports that President Trump has no intention of easing sanctions pressure on Iran. The move comes as a surprise to some, given earlier expectations of relief from restrictions that have decimated exports from one of OPEC's biggest producers.

The price of Brent crude is currently trading at $103.13 per barrel, with West Texas Intermediate at $89.53. This represents a gain for both benchmarks, with Brent up around $10 per barrel and WTI up approximately $3 per barrel compared to the end of the month.

Analysts point to continued uncertainty over sanctions relief and negotiations as keeping a geopolitical risk premium embedded in prices. Sugandha Sachdeva, founder of SS WealthStreet, notes that 'Continued uncertainty over sanctions relief and negotiations is keeping a geopolitical risk premium embedded in prices.' Improving supplies could cap further gains, but renewed disruption or an escalation in tensions could trigger another rally.

Data from Kpler suggests oil exports from the Persian Gulf have rebounded strongly this month, with Hormuz flows alone at 13.2 million barrels daily, representing 77% of pre-war levels. However, total Middle East oil export rates remain below pre-conflict levels, contributing to an undersupplied market.