Iranian exports remain reduced, with significant risk attached to transiting the Strait of Hormuz.

Sanctions replace military pressure as the main instrument

US Treasury Secretary Scott Bessent is expected to announce new economic measures against Iran on Monday, shifting the focus from further military action towards sanctions. The measures could target Iran’s largest trading partners, including China, Turkey and India, and extend beyond the earlier focus on smaller refineries, ports and agents. Annual inflation in Iran is above 80% and the rial has fallen 4.5% to an all-time low, while the US naval blockade has left Iranian crude exports virtually halted.

Escalation of Iranian attacks is seen as the main risk for owners

With Iranian exports already largely halted, the effect of further sanctions would be reduced. The more material risk for tanker owners is how Tehran responds. Iran has said it will treat support for the campaign as an act of war and repeated its threat that no oil would leave the Persian Gulf. On Monday, a tanker was struck by an unidentified projectile 63 nautical miles west of Yanbu, with all crew reported safe. Tonnage trapped inside the Gulf, alongside higher war risk insurance costs, continues to support crude tanker earnings.

Sources: Bloomberg