Story
Oil Prices Dip on Profit-Taking Despite Looming US Sanctions on Iran
Summary
Crude oil benchmarks fell by around 1% in early trading, pulling back from a two-week rally as the market braces for what the U.S. has described as its 'strictest' sanctions ever against Iran.
Oil prices declined in early Monday trade, retreating from a recent two-week surge as traders appeared to take profits ahead of an expected announcement of new, stricter U.S. sanctions against Iran that could further disrupt global supply.
Price Action
International benchmark Brent crude futures fell 0.9% to $93.51 a barrel by 19:43 ET (23:43 GMT), while West Texas Intermediate (WTI) crude futures dropped 1.1% to $86.08 a barrel. The pullback follows a strong rally over the past two weeks that saw prices climb more than 5%, according to the source material.
Stricter Sanctions on the Horizon
The market is on edge as the United States prepares to unveil what it calls its "strictest round of sanctions ever" against Iran. In an opinion piece for the Financial Times, U.S. Treasury Secretary Scott Bessent said an "economic D-Day" was coming for Iran.
AdThe new measures are expected to be officially announced at a press conference on Monday at 14:00 ET (18:00 GMT). The sanctions are a response to the ongoing standoff between the two nations, which has severely impacted maritime traffic in the Persian Gulf.
Market Impact and Regional Tensions
The conflict has centered on the Strait of Hormuz, a critical chokepoint that supplied approximately 20% of the world's oil before the current hostilities. Flows through the waterway have reportedly slowed as Iran has kept it "essentially shut," according to the source.
In response to the U.S. economic pressure, Mohsen Rezaee, Secretary of Iran’s National Security Council, warned that “not a single drop of oil will be exported” through the Strait of Hormuz if the economic conflict continues. The tensions also risk spreading, as Yemen’s Iran-backed Houthi Group has announced a naval blockade against Saudi Arabia in the Red Sea.
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