Oil Prices Fall on Profit-Booking Ahead of US Sanctions on Iran

Oil prices declined on Monday as investors booked profits following a sharp rally in crude. The retreat came after Brent crude futures gained more than 5% last week due to heightened fears of a prolonged disruption to oil shipments from the region.

The US Treasury Secretary is expected to provide details of fresh US sanctions against Iran, which has already tightened the supply outlook and analysts are pointing to significant declines in oil inventories. The Strait of Hormuz remains at the centre of concerns as the waterway is a critical transit route for energy shipments.

With Brent at $93 a barrel and US West Texas Intermediate crude declining 1.6% to $85.7 a barrel, major Asian importers are likely to face significant pressure from tighter US sanctions on Iran. China could face particular pressure as it remains the largest buyer of Iranian crude with Iranian oil shipments to China having already declined sharply.