Crude Oil Prices Ignore New US Sanctions on Iran

The White House followed up on a warning issued last week and imposed new sanctions on Iran Friday, but the oil markets showed little reaction to the move on one of the world’s largest crude producers.

In a statement Friday, National Security Advisor Mike Flynn said the US has “sanctioned 25 individuals and entities that provide support to Iran’s ballistic missile program,” Market Watch reported.

But oil prices showed little reaction to the news Friday, with an initial move higher quickly dissipating. 

Futures prices for West Texas Intermediate crude climbed 29 cents, or 0.5%, to settle at $53.83 a barrel on the New York Mercantile Exchange. Brent futures also finished with a modest gain.

Iran condemned the US action and said it would take reciprocal action against American individuals and companies, according to The Wall Street Journal.

The US move came just days after the White House warned that it has put Iran “on notice” because of its missile-test launch. It has been just over a year since the implementation of the Iran nuclear deal that is aimed at curtailing Tehran’s nuclear activities in return for easing of some sanctions by the West.

The US said the sanctions would not impact the Joint Comprehensive Plan of Action deal, “which had resulted in the lifting of sanctions against oil exports from Iran,” said Jenna Delaney, oil analyst with Platts Analytics, the forecasting and analytics unit of S&P Global Platts. 

“While there is always the possibility of new or further geopolitical risks arising, the market will now return its focus to supply and demand,” she said.