Oil Prices Continue Decline Amid New US Sanctions on Iran
Oil prices continued their decline on Tuesday despite new US sanctions on Iran. The market appears to be treating the sanctions as marginal, with investors favoring economic coercion over military risk.
Brent crude futures fell by $0.90, or 1.0%, to $91.27 a barrel, while U.S. West Texas Intermediate crude declined by $0.76, or 0.9%, to $84.25.
U.S. Treasury Secretary Scott Bessent unveiled an expansion of sanctions to cut off Iran's economic lifeline, but did not identify the countries that would be targeted or reveal when those penalties would take effect.
The U.S.-Israeli war on Iran has caused supply disruptions and led countries to draw down their commercial and strategic reserves. The Department of Energy reported that stocks of crude oil in the U.S. Strategic Petroleum Reserve fell by about 3.7 million barrels to 289.7 million barrels last week, the lowest since November 1982.
Market analysts said that economic pressure is viewed as a lower-risk path for oil supply than military action, but Iran retains the ability to disrupt shipping and maintain control over key trade routes such as the Strait of Hormuz.