FINWIRES · TerminalLIVE
FINWIRES

US Oil Update: Crude Holds Steady as US-Iran Stalemate Continues, Markets Await New Sanctions

By

Crude futures were little changed in midday trading Friday as market participants weighed tougher US measures against Iran and the risk of a broader response from China.

Front-month West Texas Intermediate crude futures were down 0.03% at $86.80 per barrel, while Brent futures were up 0.26% to $94.02/bbl.

Analysts said continued instability across the Middle East is keeping crude and refined-product prices supported as markets monitor the potential for further interruptions to regional energy flows.

"The lack of a solution in the Middle East continues to raise oil prices, which have now risen for several days in a row," Pia Fromlet, an economist at SEB Research, said in a Friday note.

Gelber & Associates analysts said WTI is trading near $86/bbl as traders take some profit after a weekly advance of almost 5%.

"Washington's harder economic stance toward Iran and the lack of progress toward reopening the Strait of Hormuz continue to keep a substantial supply premium in the market," analysts said.

Markets are now awaiting the broader sanctions package on Iran, which is likely to be announced Monday.

US Treasury Secretary Scott Bessent said Thursday that he will share details of the economic sanctions against Iran on Monday.

Washington is preparing a broad package to further isolate Iran, with measures potentially extending to foreign companies and institutions that continue commercial ties with the country, MUFG Research analyst Soojin Kim said in a Friday note.

The US plans to disclose details of the measures next week, and the scope of the action could have wider implications for international trade with Iran, Kim said.

In response, Iran's Foreign Minister Seyed Abbas Araghchi posted on X, citing sanctions imposed on Iran over the past 14 years and saying those rounds had failed.

"We have seen this movie before," Araghchi posted on X, saying it was the same story with different "bullies."

However, traders are concerned about a potential response from China, a major buyer of Iranian crude, if the measures target companies and institutions that maintain commercial ties with Iran, according to a note from Saxo Bank.

"The measures are expected to target Tehran directly, while potentially extending to countries that continue doing business with Iran, including China," analysts at Aegis Hedging said in a Friday note.

Aegis cited Rystad Energy's forecasts that Chinese crude purchases could increase by up to 1.2 million barrels per day from Q3 through year-end 2026 after the world's largest crude importer reduced purchases and refinery runs in response to the Middle East-driven price spike.

Separately, Omani and Iranian foreign ministers are also reportedly discussing options to restart talks on the Strait of Hormuz.

Meanwhile, French President Emmanuel Macron and Saudi Arabian Crown Prince Mohammed bin Salman are reportedly set to meet in Paris on Monday, with talks to focus on alternative transportation and routing options in response to disruptions in the Strait of Hormuz.

The US naval blockade has virtually halted Iran's oil exports, while vessel attacks in the Strait of Hormuz and Ukrainian strikes on Russian energy infrastructure are adding pressure to global fuel markets, Kim added.

Despite the ongoing disruptions, analysts said the oil market may be able to absorb the current supply constraints for some time.

"Even without a formal agreement to reopen the Strait, the economy and markets can likely live with the current situation for some time," SEB analysts said.

Meanwhile, Nato is reportedly hosting talks to secure the Strait of Hormuz. Nato's Supreme Allied Commander, US General Alexus Grynkewich, reportedly met with other defense leaders to secure support for protecting ship traffic in the strait.

Security risks also remain elevated beyond the Strait of Hormuz. A US-sanctioned tanker reportedly sailing under a false flag was hijacked in the Gulf of Aden and redirected toward Somalia, according to MarineTraffic on Thursday.

Six armed individuals reportedly boarded the tanker and took control of the vessel.

MarineTraffic data showed that the 32,200-deadweight-ton oil products tanker updated its AIS destination to Port Sudan on Aug. 14 and entered the Somalia "high-risk" area on Aug. 19.

Related Articles

Oil & Energy

Powerus Secures $22 Million Middle East Counter-Drone Contract to Protect Energy Infrastructure

Autonomous Power secured a $22.3 million contract to deploy counter-drone technology to protect critical oil and gas infrastructure in the Middle East, the company said Thursday.Autonomous Power, doing business as Powerus, will lead a phased deployment of networked counter-unmanned aircraft system technology that can detect, track and classify potential drone threats.The system will give the customer a unified view of drone threats through its operations center, helping operators identify and assess potential risks.The initial deployment will provide early drone warnings to support safety decisions, while allowing future integration of Powerus' Guardian interceptor technology.Powerus will deploy the system in phases based on customer needs. The company did not disclose the customer, locations, facilities or system configurations."This commercial contract reflects the direction we believe the counter-drone market is heading - toward integrated, networked protection of critical oil and gas infrastructure," said Brett Velicovich, co-founder and president of Powerus.The deal expands Powerus' work with international energy operators and strengthens its position in counter-drone protection for critical infrastructure.

Oil & Energy

Mauritius, India Sign Energy Deals to Strengthen Petroleum Supply Security

Mauritius and India have agreed on new energy cooperation, including an oil and gas memorandum of understanding and a supply agreement aimed at strengthening Mauritius' energy security, the Mauritius Prime Minister's Office said Thursday.The memorandum will promote cooperation between the two countries on petroleum product supplies and strengthen Mauritius' access to energy.The MOU was exchanged by Jean Daniel Philippe Labonne, supervising officer at Mauritius' Ministry of Commerce and Consumer Protection, and Anurag Srivastava, India's High Commissioner to Mauritius.Mauritius' State Trading and Indian Oil also entered into a Sale and Purchase Agreement to ensure continued, secure supplies of white oil products."Since 2025, our partnership has evolved into a strategic relationship encompassing cooperation in infrastructure, health, education, maritime security and sustainable development, with this new collaboration in energy security adding yet another dimension to it," said Mauritius Prime Minister Navinchandra Ramgoolam.Ramgoolam said the partnership will ensure continuity of energy supplies, protect Mauritius' economy and citizens from external disruptions, and support the country's sustainable growth."This milestone in our energy partnership is yet another expression of a truly special friendship that will continue to flourish through generations," said Hardeep Singh Puri, India's Minister of Petroleum and Natural Gas.Ramgoolam, Puri and other officials attended the exchange ceremony held at Port Louis.

Oil & Energy

Hormuz Traffic Remains Disrupted as Attacks, Mine Threat Constrain Tanker Flows

Commercial vessel traffic through the Strait of Hormuz remained disrupted this week as attacks and the threat of mines kept tanker traffic constrained.The latest Joint Maritime Information Center note released Thursday reported one confirmed attack in the Strait of Hormuz, according to the UK Maritime Trade Operations.The strategic waterway remains rated a severe threat area, with the risk of drifting or uncharted mines continuing to pose a danger to vessels operating in and around the traffic separation scheme.Commercial traffic through the strait remained below-normal levels in the Hormuz, according to the note.The UKMTO reported one confirmed attack in the Southern Red Sea and Bab el-Mandeb during the reporting period."Commercial traffic through the Southern Red Sea and Bab el-Mandeb continues at reduced levels, consistent with the pattern established after the 20 July Houthi declaration of a naval blockade against Saudi Arabia and earlier confirmed attacks on vessels in the region," according to the JMIC note.The security situation deteriorated further in the Gulf of Aden, where six armed men reportedly boarded an oil-products tanker, seized control of the vessel and redirected it toward Somalia, the maritime agency said.Meanwhile, the US has continued enforcing a blockade in the Strait of Hormuz against vessels attempting to enter or leave Iranian ports.The Central Command in a post on X on Thursday said it has redirected 67 commercial vessels, disabled three and boarded two to enforce its blockade against Iran as of Thursday.The International Maritime Organization's daily Strait of Hormuz incident tracker showed that the total number of confirmed maritime security incidents in the region was 67 as of Thursday.An incident was reported on Monday in the Strait of Hormuz where a bulk carrier was damaged, and a seafarer was killed, according to the tracker.The IMO tracker provides a daily log of verified strikes on ships attempting to transit the Strait of Hormuz since the conflict began, with the earliest incident recorded on March 1.The combination of depressed Hormuz traffic, continued attacks in the Red Sea and the latest hijacking in the Gulf of Aden points to a fragmented maritime security environment across the UAE.