Oil prices are falling amid fears about demand, but new Iran sanctions are limiting the damage

17 Jun 2022 , 11:46 AM

Oil prices fell slightly on Friday as demand concerns arose following interest rate hikes earlier in the week, while the decline was limited by new penalties on Iran.

Brent crude prices slid by 47 cents, or 0.4%, to $119.34 a barrel, while WTI crude futures in the United States fell 57 cents, or 0.5%, to $117.02 a barrel.

Brent crude futures would witness their first weekly decline in five weeks if losses hold through the day, while U.S. crude futures would see their first weekly dip in eight weeks.

Central banks throughout Europe boosted interest rates on Thursday, some by surprising amounts, and hinted at much higher borrowing costs in the future in order to combat skyrocketing inflation, which is eroding savings and squeezing corporate profits.

On Thursday, Argentina’s central bank raised its benchmark interest rate by the largest in three years, as the South American country battles high inflation of over 60%.

These changes followed the Federal Reserve of the United States raising interest rates by 75 basis points this week, the most since 1994.

The US placed sanctions on Chinese and Emirati corporations, as well as a network of Iranian firms that assist in the export of Iran’s petrochemicals, on Thursday, a move that could be aimed at increasing pressure on Tehran to resurrect the 2015 Iran nuclear deal.