Oil Prices Drop as Traders Downplay Sanctions Campaign
Oil prices plummeted by around 4% on Tuesday to a one-week low as traders downplayed the US sanctions campaign against Iran, viewing economic pressure as less threatening than military conflict.
The Brent crude futures price dropped $3.83, or 4.2%, to $88.34 per barrel by 11:44 a.m. EDT, while US West Texas Intermediate crude futures fell $3.34, or 3.9%, to $81.67.
Ole Hansen, Saxo Bank's head of commodity strategy, said the shift from military conflict to economic pressure in the US-Israeli war with Iran has reduced some of the oil market's anxiety.
The Treasury Secretary Scott Bessent unveiled measures on Monday that were seen as less forceful than expected, giving countries time to comply with new directives.
Ritterbusch and Associates described Tuesday's sharp decline in oil prices as an 'overreaction' by market participants.