Oil prices jump as fresh US sanctions on Iran spark supply fears

On Tuesday, the US government’s new sanctions against Iran’s oil industry sparked fresh concerns about supply disruption, which led to an increase in oil prices in Asian trading. As of 21:14 ET (02:14 GMT), Brent Oil Futures were up 0.6 percent to $75.19 per barrel, while West Texas Intermediate (WTI) crude futures were up 0.7 percent to $70.92 per barrel. Concerns about Iran’s supply arise from US sanctions. The sanctions, which were made public by the Treasury Department, are meant to put more financial pressure on Iran by targeting over 30 people and businesses that are part of the country’s oil supply chain. These include brokers and tanker operators in China, Hong Kong, and the United Arab Emirates. The move is part of President Donald Trump’s “maximum pressure” campaign to stop Iran’s petroleum exports, especially to China and other major consumers. Treasury Secretary Scott Bessent emphasized the administration’s commitment to using all available tools to target Iran’s oil supply chain, warning of significant sanctions risks for those dealing in Iranian oil.
In response to these developments, oil futures experienced modest gains on Monday. The reaction of the market was a reflection of worries about the potential shortage of foreign supply caused by the new sanctions against Iran. Markets uncertain amid complex supply-demand scenario
The overall outlook for oil prices is still uncertain, despite the sanctions’ upward pressure. Some market fears could be dispelled by potential cease-fire agreements between Israel and Hamas and Russia, Ukraine, and Russia, possibly compensating for price increases. Media reports have shown that OPEC and its allies, collectively known as OPEC+, are contemplating further delays in increasing oil production due to persistently weak demand and rising output from non-member countries. The group initially intended to ease production cuts in April 2025, but this date has been pushed back several times, with the most recent change moving the start date to April 2025. These potential production delays are expected to support oil prices by limiting supply. However, the global oil market is projected to return to a surplus in 2025, despite OPEC+ extending supply cuts, which could lead to lower prices in the coming year.
Additionally, supply dynamics may be affected by the return of Kurdish oil exports to Iraq.