Oil prices rise for fifth day amid new US pressure on Iran

Oil prices continued to rise amid a new escalation between the US and Iran. Benchmark Brent is trading near $92 per barrel, while American West Texas Intermediate (WTI) is around $86.

The market reacted to US President Donald Trump's announcement of the start of a large-scale campaign of economic pressure on Tehran. According to Bloomberg, oil has been rising for a fifth consecutive trading session, and over the previous four sessions Brent gained more than 5%.

Trump called the upcoming measures "economic war and isolation of unprecedented scale" and announced an "economic D-Day" for Iran.

The US president also warned of serious economic consequences for countries that allow their financial institutions, companies, airports or state structures to help Iran.

Among the areas Washington intends to shut down, Trump named oil smuggling, cash transfers, exchange operations, the use of ship registries and shell companies.

However, the US president has not yet presented a specific list of new sanctions or mechanisms for their application.

Market fears a blow to Iranian oil exports

For the oil market, the key question is how hard the US will pursue buyers of Iranian crude and companies that help Tehran circumvent existing restrictions.

China remains the largest buyer of Iranian oil. Official Chinese statistics have not recorded imports from Iran since 2022, but significant volumes of crude reach private refineries through indirect supply schemes.

Iranian oil is usually sold at a significant discount due to sanctions risks. Further tightening of US restrictions could complicate such supplies and increase tensions between Washington and Beijing.

Strait of Hormuz remains the main risk

Uncertainty around the Strait of Hormuz adds an additional premium to the oil price. Before the war, about one fifth of global oil supplies passed through this route.

The United States and Iran continue to make contradictory statements regarding the shipping regime. American military assist in escorting some vessels through the strait, but shipping volumes remain below pre-war levels.

It is the risk of new supply disruptions that keeps oil quotations at high levels. In morning trading on August 20, WTI futures were at approximately $85.9 per barrel.

Source: Bloomberg, The Wall Street Journal.