Trump's Sanctions Threat Sends Oil Prices Soaring
US President Donald Trump's threat of economic sanctions on Iran's trading partners has sent oil prices rising. International benchmark Brent crude futures settled at $94.39 a barrel, up 0.7% or $0.61 from Thursday.
The WTI crude price also increased by 0.3%, settling at $87.06 a barrel. Both benchmarks have seen significant gains this week, with Brent rising 6.4% and WTI increasing 5.7%. They have touched their highest levels since July 24 in the previous session.
Analysts believe that sanctions have been effective in bringing Iran to heel. However, others warn that an increase in shipping incidents and retaliation against economic sanctions could exacerbate the current situation.
Pipelines, shuttles, US shale production, and a recovering Venezuela are adding barrels to the market, according to Phil Flynn of Price Futures Group. The Strait of Hormuz remains constrained, but it is no longer the only story.