Brent gains as Trump imposes stricter sanctions against Iran

The front-month ICE Brent contract has gained $0.28/bbl on the day from Friday, to trade at $75.19/bbl at 09.00 GMT.

PHOTO: Oil barrels. Getty Images

Upward pressure:

Brent’s price moved higher over the weekend amid new US sanctions against Iranian crude oil exports.

In an effort to drive Tehran’s oil exports down to zero, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned several shipping companies and vessels last week, for transporting illicit Iranian crude oil to China.

“Trump administration announced sanctions that sent a clear message to anyone that’s dealing with Iranian oil, either shipping or oil companies, could be taking a huge risk,” Price Futures Group’s senior market analyst Phil Flynn remarked.

The targeted companies are allegedly involved in generating revenues to support regional armed groups, including the Yemen-based Houthis and the Lebanon-based Hezbollah.

Oil prices found support after the US “imposed sanctions on an international network facilitating the shipment of Iranian crude to China,” two analysts from ING Bank said.

Downward pressure:

Brent’s price gains were partially capped amid concerns over a slowdown in demand due to the escalating Sino-US trade tensions.

In response to the US government’s imposition of 10% tariffs on all Chinese goods imports from 1 February, the customs tariff committee under China's State Council has announced retaliatory 10% tariffs on crude oil imports from the US starting today.

“Trump’s tariffs on Chinese imports have stoked fears of an escalating trade war that may damage global economic growth,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

By Aparupa Mazumder

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