HOUSTON: Oil prices fell on Friday after the United States imposed new sanctions on Iran, signaling a diplomatic approach that has raised hopes for a negotiated resolution to the ongoing Israel-Iran tensions. The move came just a day after former President Donald Trump suggested it may take two weeks to decide the extent of U.S. involvement in the escalating conflict.
Brent crude futures dropped $2.23, or 2.8%, to $76.62 per barrel as of 12:14 p.m. EDT. U.S. West Texas Intermediate (WTI) crude for July delivery was down 15 cents, or 0.2%, at $74.99. The more actively traded August WTI contract slipped 5 cents, or 0.1%, to $73.45.
Despite the day’s losses, Brent crude was on pace for a weekly gain of 3.2%, while front-month WTI was set to rise 2.8% over the same period.
The U.S. Treasury Department announced fresh sanctions targeting entities linked to Iran, including two based in Hong Kong, as well as additional counterterrorism-related measures.
“While the sanctions are tough, they appear to be part of a larger diplomatic strategy,” said John Kilduff, partner at Again Capital in New York. “This suggests the U.S. is looking for a way to address tensions with Iran through negotiations rather than open conflict.”
Market analysts noted that the perception of a possible diplomatic off-ramp has helped ease fears of a major supply disruption, putting downward pressure on oil prices despite the latest sanctions.
