Oil Shrugs Off Trump’s ‘Toughest Sanctions in History’

Oil Shrugs Off Trump’s ‘Toughest Sanctions in History’

Tom Kool

Fri, August 28, 2026 at 6:55 PM GMT+3 5 min read

• CL=F -0.01%

Oil holds near $90 despite sweeping Iran sanctions as uncertainty over Hormuz transits keeps markets on edge.

Friday, August 28, 2026

The US announcement of 'toughest sanctions in history' against Iran did relatively little to push oil prices away from their comfort zone around $90 per barrel (for ICE Brent), with Qatari and Pakistani mediation so far failing to bring the warring sides closer. After President Trump rejected the extension of the June MoU in any form, the on-and-off nature of Hormuz transits will be the main driver of price developments in the upcoming days.

Hormuz Deal Inches Forward, but Strait Stays Shut. Iran and Oman are negotiating a temporary shipping corridor, having reported progress on control and revenue-sharing, with Tehran insisting that passage will remain blocked until Washington lifts sanctions, ends its blockade and pays compensation.

Saudi Heavy Crude Finds a Route Around Hormuz Risk. Saudi national oil company Saudi Aramco (TADAWUL:2222) has sold at least 4 million barrels of Arab Medium and Heavy to PetroChina for September loading outside the Hormuz strait, ramping up Gulf transits as Yanbu loadings falter.

Related: U.S. In Talks To Take Direct Ownership Of Venezuelan Oil Fields

Europe Revives Windfall Tax as Diesel Soars. Six EU countries, including Germany and Spain, want September talks on an EU-wide oil windfall profit tax as the Hormuz crisis inflates energy costs, with European diesel surging over 70% since the war began, versus 25% for crude and 20% for gasoline.

Iran War Pushes UK Winter Energy Cap Up 4%. Britain's household energy price cap will rise to £1,723 from October as UK natural gas prices doubled from pre-war levels, lifting unit costs to a three-year high and threatening to push domestic energy debt from £6 billion currently to £7 billion by year-end.

India's Coal Plants Start Running on Empty. India's Energy Ministry reported that 45 coal plants have critically low inventories, up from 31 in July, as rains disrupt mining in northeastern regions while El Niño heat lifts cooling demand across the west; with nationwide stocks dipping 19% to 30.95 million tonnes.

Trump Seeks a Long-Term Lock on Venezuelan Oil. The Trump administration is nearing an accord granting US companies access to 17 oilfields and guaranteeing the resulting crude supplies to US refiners, even though the proposed lease-and-auction model could clash with Venezuela's constitution.

Japan Wants Its LNG Carriers Built at Home Again. Tokyo plans to restore domestic LNG shipbuilding and construct 3–5 vessels annually from 2035, rebuilding capacity lost to South Korea and China since 2019, although Japan will need subsidies and technology transfers to close its cost and expertise gaps.

Key US LNG Terminal to Double Capacity. US LNG developer Sempra Infrastructure (NYSE:SRE) has begun federal permitting for a 27 mtpa expansion that would lift total capacity to 54 mtpa by 2036, although the expansion would require 7.5 BCf/d of feedgas—far above its current 4 BCf/d pipe capacity.

Canada Hits Back With 50% US Metals Tariffs. Ottawa will impose matching duties of 15–50% on nearly $20 billion of US goods from September 8, doubling tariffs on American steel and aluminium to 50% after trade talks failed, sparing energy imports and launching a $5.4 billion domestic support package.

White House Trades Biofuels for Pump-Price Relief. The Trump administration is pushing for 1.2–1.8 billion RIN waivers to be issued toward small refiners to push gasoline prices below $4 per gallon, potentially eliminating 500 million gallons of biodiesel and renewable diesel demand in the US.

Panama Canal Slot Hits a Record $5.3 Million. South Korea's SK Gas reportedly paid $5.3 million to secure passage as El Niño forces the canal to cut daily transits to 32 in September, pushing roughly half of US LPG carriers around Africa and extending Houston–Japan voyages from 26 to 45 days.

Brazil's Oil Export Tax Gets Extended—and Suspended. The Brazilian government extended the 12% oil export levy for 60 days from September 8 just as a federal court ordered its suspension, setting up a legal battle with producers including Petrobras, which paid around $948 million in export taxes in Q2.

French Major Exits Russia's Top LNG Project. France's oil major TotalEnergies (NYSE:TTE) transferred its 10% stake to Novatek subsidiary NordLine, formally ending its ownership in the sanctioned Russian LNG project while retaining the right to recover $1.3 billion in shareholder loans, once sanctions are lifted.

Oil Trader Eyes a $1.5 Billion Haynesville Gas Bet. Commodities trader Gunvor is in early talks to acquire Silver Hill's assets for $1.2–$1.5 billion, adding 58,000 acres and 370 MMcf/d of production as it builds an integrated US gas position geared toward rising AI power demand and Gulf Coast LNG exports.

Jellyfish Back At It Again. Swarms of jellyfish have curbed Gravelines' output for the second time this month, leaving four of six 900-MW reactors offline and reducing production from the other two, while a looming union strike helped push French month-ahead power prices to their highest since January 2025.

By Tom Kool for Oilprice.com

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