Iran Sanctions Fail to Spark Oil Price Rally as Markets Focus on Enforcement

Oil prices dropped more than $2 a barrel on Monday as investors locked in profits from recent gains and largely shrugged off a fresh round of US sanctions on Iran.

Brent crude settled down around $2, or roughly 2.3%, to about $92, while US West Texas Intermediate crude fell a similar amount to near $85, according to Reuters.

The sell-off came despite an escalation in US pressure on Tehran, with Treasury Secretary Scott Bessent announcing an expansion of secondary sanctions that Washington can impose on entities and countries maintaining business ties with Iran.

Bessent warned the country faced a choice between normalcy or total isolation, but analysts said the latest announcement offered little that markets had not already priced in.

The real test lies in how aggressively Washington enforces secondary sanctions against Iran's remaining trading partners, particularly China, since anything short of a material cut in Chinese purchases would likely limit the impact on Iranian oil revenue.