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Crude falls as US sanctions threat on Iran eases war fears
Crude falls despite US threat of 'toughest sanctions' on Iran. Bessent says maximum pressure avoids military conflict, removing war premium from oil prices.
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Crude oil futures slipped on Friday despite the Trump administration threatening what Treasury Secretary Scott Bessent called the “toughest sanctions in history” on Iran. The move suggested markets were pricing in a lower risk of military conflict, not a tighter supply outlook.
October Brent crude fell 0.34% to $93.46 a barrel in morning trade. WTI for October delivery dropped 0.50% to $86.40. On India’s MCX, September crude oil futures traded at ₹8,282, down 0.26% from the previous close of ₹8,304.
Bessent told CNBC that the maximum economic pressure campaign would likely make a large-scale military restart unnecessary. “If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart,” he said. The term “kinetic restart” refers to the use of military force.
President Donald Trump on Wednesday said the US would levy major penalties against any country providing “any type of lifeline” to Iran. He called for allies to “isolate, and defeat, the Iran threat.”
The threat of tighter sanctions on Iran, one of OPEC’s largest producers, typically pushes crude prices higher by raising the risk of supply disruption. Prices fell instead. Bessent said the sanctions would likely avoid a large-scale military conflict, which traders interpreted as reducing the immediate risk of a supply shock in the Strait of Hormuz.