Oil Prices Slip as US Sanctions Against Iran Loom

Crude oil futures fell on Monday as market participants took profits ahead of the US announcement on new sanctions against Iran. West Texas Intermediate (WTI) dropped by 2.16% to $85.18 a barrel, while Brent slipped by 2.19% to $92.32. The sharp decline in prices was largely due to profit-taking following last week's surge, which saw both benchmarks rise over five percent.

The current tensions between the US and Iran remain high, with the U.S. Central Command announcing that its naval blockade of Iranian ports has diverted 70 commercial ships and disabled three others. In response, Iran has intensified its oversight of the Strait of Hormuz, releasing a list of dozens of vessels it accuses of breaching transit rules.

The new US sanctions package is expected to be unveiled on Monday afternoon by Treasury Secretary Scott Bessent, who described the initiative as an 'economic D-Day'. The move aims to discourage buyers and middlemen from dealing with Iranian oil, which could further tighten supply. However, Tehran has vowed to retaliate against any country joining the US campaign.

Pakistani Army Chief Field Marshal Asim Munir is set to visit Tehran on Monday in an effort to nudge both Washington and Tehran back towards dialogue.