US vows toughest sanctions on Iran as Brent holds near $93

US Treasury Secretary Scott Bessent said Washington will impose the "toughest sanctions in history" on Iran, pushing Brent crude to $93.41 a barrel even as he argued a return to large-scale combat is unlikely.

"If we are doing the maximum economic pressure, then that means that likely there will not be a large-scale kinetic restart," Bessent told CNBC, framing the sanctions as a "one-two punch" alongside the naval blockade imposed on Iran in April and paused for a month in mid-June.

Crude prices were slightly lower early Friday but on course for a second consecutive weekly gain, with Brent rising about 2 percent Thursday to $93.41 a barrel. The BWET shipping-tracking exchange-traded fund has climbed 98 percent over the past month as the conflict disrupted traffic through the Strait of Hormuz, a waterway that carried about a fifth of all traded oil before February.

Bessent will detail the package at a press conference Monday, with the threat of "tremendous economic consequences" extending to any country — including China, which buys more than 80 percent of Iran's shipped oil — that provides Tehran a financial or trade lifeline. The escalation tightens supply expectations for a market already pricing in the failure of two ceasefire deals announced in April and June.

Iran has weathered near-continuous, punishing economic sanctions for nearly 50 years, since the Islamic Revolution of 1979. Before Bessent spoke, Iran's foreign ministry condemned US economic and trade sanctions as "economic terrorism" that would not "create even the slightest hesitation in Iranians' determination to safeguard Iran's independence, dignity and national sovereignty."

In a social media message Wednesday, Trump promised "economic warfare and isolation on an unprecedented scale," warning that "any country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face tremendous economic consequences." The warning appeared to extend to US allies that have helped mediate peace talks.

The administration's threats come as Washington struggles to assert control over the Strait of Hormuz, where Iran has continued attacks against vessels. Tehran's ally, the Houthis in Yemen, has imposed a maritime blockade against Saudi Arabia in the Red Sea, forcing the kingdom to redirect some crude through pipelines toward the Mediterranean via Egypt.

China's embassy in Washington said "sanctions and pressure do not help resolve the problem," calling on the relevant parties to resolve the issue through political and diplomatic means. Bessent, asked whether the United States could target China for doing business with Iran, said many conversations were best to have in private, adding that "the Chinese get 50 percent of their energy from the Gulf."

Trump, however, is under pressure at home to end the unpopular war, with high fuel prices dragging down his approval ratings and potentially threatening his party's control of Congress in midterm elections in November. Iranian Foreign Minister Abbas Araghchi called Trump's comments an attempt to divert American public opinion from domestic financial problems, including record debt and rising interest rates.

The last time Washington escalated economic pressure on Tehran to this degree, in 2018, the reimposition of sanctions on Iranian oil exports cut the country's crude shipments by more than 80 percent within a year, according to tanker-tracking data. Oil prices, however, ultimately retreated as other producers filled the gap — a pattern that suggests the current risk premium may prove short-lived if diplomacy resumes.

This article is for informational purposes only and does not constitute investment advice.