Iran Sanctions to Hit Oil Markets as US Announces 'Economic D-Day'
Oil prices dropped nearly 1% on Monday as investors took profits after a strong two-week run-up, likely due to the prospect of stricter US sanctions against Iran that could lead to more supply disruptions.
The US is set to announce its strictest round of sanctions yet against Iran on Monday, with Treasury Secretary Scott Bessent stating in an opinion piece for the Financial Times that an 'economic D-Day' was coming for Iran.
Bessent's comments come after several US officials, including President Donald Trump, warned of economic warfare against the country. The ongoing standoff in the Strait of Hormuz and surrounding regions has shown few signs of easing, with Tehran keeping the waterway effectively shut in response to US hostilities.
Hormuz has become a flashpoint in the conflict, given that it supplied about 20% of the world's oil prior to the US-Iran war. Markets were positioning for more disruptions in the region after the US flagged a prolonged conflict with Iran.