Oil prices edged higher this week as the US threatened to impose unprecedented economic measures on Iran amid ongoing conflict in the Strait of Hormuz. Brent crude settled above $88 a barrel, marking a roughly 6% gain for the week, according to livemint.com. The war in the region has now lasted six months, disrupting oil output and exports from key OPEC producers in the Persian Gulf.
The US Treasury Secretary Scott Bessent told Newsmax that the US will apply economic pressure on Iran "like the world has never seen," with further announcements expected next week. The US also plans to maintain its naval blockade of Iranian ports to pressure Tehran into reopening the critical energy chokepoint. Oil futures have surged more than 40% this year as a result of the conflict's impact on supply, livemint.com reported.
The rising oil prices come amid faltering US-Iran talks to end the war, which have left oil and gas prices poised for significant weekly gains. Additionally, US economic data released on Friday showed a drop in retail sales and deteriorating consumer sentiment due to rising living costs linked to the Middle East conflict. This data reduced expectations for a Federal Reserve rate hike next month, supporting gold prices and weakening the US dollar, according to livemint.com.
Brent crude's settlement above $88 a barrel this week reflects the market's reaction to geopolitical tensions and economic data. The US Treasury Secretary's comments and the ongoing naval blockade underscore the heightened economic pressure on Iran, with further developments anticipated next week, livemint.com noted.