Oil Prices Plunge as Markets Shrug Off Latest US Sanctions on Iran

Oil prices plummeted nearly 3% on Tuesday as markets downplayed the impact of expanded US sanctions on Iran, instead focusing on easing fears of a broader disruption to Middle Eastern crude supplies.

Brent crude fell below $90 a barrel, slipping to $89.25, while US West Texas Intermediate (WTI) crude declined over 3% to $82.20.

Investors took profits after a two-week rally, with both benchmarks settling more than 2% lower on Monday.

The shift from an escalation in military conflict to economic pressure has reduced some of the oil market's anxiety, according to Ole Hansen, head of commodity strategy at Saxo Bank.

However, supply disruption risks remain, and Iran still retains the ability to respond by disrupting shipping, which continues to keep a residual premium in the oil price, said Tim Waterer, chief market analyst at KCM.