The Oil Token (OIL) is up more than 24% over the last 24 hours as the U.S.-Iran tensions heated up due to the latest oil sanctions.
Launched on the Arbitrum blockchain, OIL is an oil-based token. An oil-based token is a cryptocurrency whose value is tied to oil — in particular, the price of crude oil. An oil-based token is essentially a type of commodity-backed token.
OIL has rallied more than 47% within a week and was trading at $0.0001141 at press time.
On May 1, President Donald Trump introduced immediate secondary sanctions on countries or individuals that purchase any amount of oil or petrochemicals from Iran. Those violating the sanctions will not be allowed to do business with the U.S., he wrote on the Truth Social app.
The next day, Trump wrote on Truth Social that gasoline hit the "lowest in years" price of $1.98 a gallon.
However, the price was nowhere close to even $2 a gallon. As per AAA data , gasoline's price stood at $3.18 a gallon on May 2.
Iran is one of the largest oil-producing countries, and its fraught relationship with the West has frequently led to harsh sanctions imposed against the country.
A significant number of people in Iran depend on crypto due to national currency devaluation. In fact, the government abruptly stopped crypto withdrawals from Iranian exchanges due to a record currency decline.
In 2024, Iranian services occupied a significantly larger share of sanctions-related crypto activity and surged $4.18 billion, Chainalysis reported on Feb. 15.
Crypto activity spiked frequently in Iran during periods of geopolitical crises, the report mentions.
