Oil Prices Surge Over 6% Amid US-Iran Tensions and New Sanctions

Brent crude oil prices have surged more than 6% this week, reaching levels not seen since late July. On Thursday, prices rose over 2% to approximately $93.80 (Sh12,149) per barrel, driven by escalating tensions between the United States and Iran.

The spike follows President Donald Trump's announcement of a new suite of economic sanctions targeting Iran's financial and commercial sectors. These measures aim to cut off Tehran from international banking, shipping registries, and cash transfer networks suspected of facilitating Iranian oil smuggling. Trump warned that countries continuing business with Iran could face severe economic consequences.

Impact on Global Oil Supply

The Strait of Hormuz, a critical chokepoint for global oil shipments, remains a flashpoint as the US and Iran confront each other over control of the waterway. Despite heightened security risks, significant volumes of crude continue to transit the Strait, with Gulf producers employing alternative routes and discreet shipments to maintain supply.

Nevertheless, any prolonged disruption could tighten global oil markets further, pushing prices higher. The United Arab Emirates has also joined in imposing financial restrictions on Iran following missile attacks, intensifying economic pressure on Tehran.

Ongoing US Campaign Against Iran

• Sanctions on Iranian oil exports and associated companies
• Naval blockade of Iranian ports
• Targeting of brokers and tankers linked to Iranian crude sales

These efforts form part of a broader US strategy to compel Iran back to negotiations concerning its nuclear program and regional activities.