Oil prices slipped slightly on Friday but are still heading for a second weekly gain. The market has been rattled by rising tensions between the US and Iran, with no clear path to a resolution.
Brent crude fell 0.18% to $93.61 a barrel, while West Texas Intermediate dropped 0.41% to $86.47. Despite Friday’s dip, Brent has gained more than 5.8% this week and WTI is up 4.8%.
Both benchmarks hit their highest levels since July 24 in Thursday’s session.
US Treasury Secretary Scott Bessent warned this week that Iran would face “the toughest sanctions in history.” President Donald Trump echoed that message, threatening economic consequences for any country doing business with Tehran.
Bessent suggested the sanctions could reduce the need for new military operations. But it is not yet clear what the new measures will include, given the US has already placed heavy restrictions on Iranian oil exports.
BREAKING: Iran is systematically preparing to damage Trump's presidency through economic warfare, aimed at making him lose the November midterms, per a senior Iranian official in Tehran familiar with the matter.
The plans include strikes on Gulf oil terminals to surge global…
— The Hormuz Letter (@HormuzLetter) August 20, 2026
Iran dismissed the threats. China, one of the biggest buyers of Iranian crude, also pushed back against the warnings.
The interim peace deal between the US and Iran expired this week. Neither side has made any move to restart talks.
The Strait of Hormuz, which handled about a fifth of global oil and liquefied natural gas supplies before the conflict, remains effectively blocked.
🚨 IT'S OFFICIAL: Iran is slowly realizing that President Trump and the US military are SUCCEEDING in covertly sneaking oil out of the Strait of Hormuz to the tune of 10 MILLION+ BARRELS
Some nights hit 15-20 million…that's pre-war flows!
Even CNN had to admit: Iran is LOSING… pic.twitter.com/Uvk4RihEV6
— Eric Daugherty (@EricLDaugh) August 20, 2026
Ship-tracking firm Kpler reported that only seven commercial vessels passed through the waterway on Thursday. That was half the number from the day before.
Iran has said it will keep the strait closed until the US honors the terms of the now-expired peace deal signed in June.
ANZ analyst Soni Kumari said the market is adjusting to the reality that supply conditions are unlikely to return to pre-war levels anytime soon.
Oil supply has also been disrupted from other major producers, including Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait.
On top of the Iran situation, Ukraine’s military struck Russia’s TANECO oil refinery in the Tatarstan region and the Tamanneftegaz oil terminal in the Krasnodar region, adding further pressure on global supply.
The US-Israeli military campaign against Iran began in late February. The conflict is now approaching six months with no signs of a ceasefire.
Analysts say the US blockade and the threat of stricter sanctions are keeping prices elevated. With the Strait of Hormuz still largely shut, traders see little reason to expect prices to fall sharply in the near term.
Iran’s refusal to reopen the waterway without a diplomatic agreement suggests the standoff could continue well into the coming weeks.
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