Brent unbothered by US economic sanctions on Iran

The front-month ICE Brent contract has declined $2.64/bbl on the day, to trade at $90.14/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent’s price has managed to trade above the $90/bbl mark, as oil flow through the Strait of Hormuz continues to remain severely choked.

As of yesterday, only four commercial ships transited the strait, with one vessel navigating the passage with its AIS transponder switched off, market intelligence provider Windward reported.

This meagre count marks a staggering plunge from pre-war traffic levels, which typically hovered around 140 daily transits.

“Persian Gulf producers have partially offset the impact of the Strait of Hormuz disruption by relying on alternative export routes, but these remain fragile,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent crude’s price has declined this morning, as the oil market seems largely unfazed by the US’ economic campaign against Iran, market analysts said.

“Oil prices drifted lower… despite renewed US plans to tighten economic pressure on Iran,” two analysts from ING Bank said.

The US announced nearly 60 Iran-related sanctions and threatened imposing secondary sanctions on international allies who continue trading with Iran.

Yet, the oil market remains sceptical about how severely these measures will actually constrict global crude flows and demand growth.

Oil traders are viewing Washington’s “effort to nudge partners away from Iranian trade as marginal rather than market‑moving,” ING Bank’s analysts remarked.

By Aparupa Mazumder

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