Oil prices moved lower on Friday, pulling back modestly from one-month highs after the United States said it was preparing its toughest economic sanctions yet against Iran.
Brent crude futures, the global benchmark, fell 0.2% to $93.57 a barrel by 04:11 ET (08:11 GMT), while US West Texas Intermediate crude futures slipped 0.4% to $86.50 a barrel.
Despite the decline, crude remained on course for a second consecutive week of strong gains as tensions between Washington and Tehran over the Strait of Hormuz showed little sign of easing. Brent was heading for a weekly advance of more than 5%.
US sanctions threat keeps geopolitical risk elevated
The latest move in oil prices follows renewed threats from US President Donald Trump to impose tougher economic sanctions on Iran in an effort to pressure Tehran into accepting a peace agreement.
Trump has also warned of severe economic consequences for countries that continue doing business with Iran.
US Treasury Secretary Scott Bessent reinforced that message on Thursday, saying Iran would face the “toughest sanctions in history.”
However, Iran has largely rejected Washington’s threats, while China, a major buyer of Iranian crude, has also pushed back against the prospect of additional sanctions.
Details of new measures remain unclear
It is not yet clear what the new restrictions will involve, given that the United States already maintains sanctions on Iranian oil exports.
Washington also continues to enforce a naval blockade against Iran that was introduced earlier this year.
Even so, the latest rhetoric from Trump suggests that tensions in the Middle East are unlikely to ease in the near term, keeping the risk of disruption to regional energy supplies firmly in focus.
Strait of Hormuz remains key supply concern
Commercial shipping through the Strait of Hormuz continues to run at only a fraction of pre-conflict levels, according to shipping data, despite US claims suggesting otherwise.
The waterway remains one of the most important transit routes for global oil supplies and has become a central flashpoint in the conflict with Iran.
Tehran has indicated that it intends to keep the route effectively closed until the United States complies with the terms of an interim peace agreement signed in June that has since expired.
With tanker traffic still heavily restricted and no clear diplomatic breakthrough in sight, oil markets continue to price in a substantial geopolitical risk premium.