Oil Prices Slump Ahead of US Sanctions on Iran

Oil prices declined by over $1 per barrel on Monday as investors took profits ahead of an expected announcement from Washington about imposing new sanctions on Iran. The US Treasury Secretary, Scott Bessent, is set to hold a press conference at 2 p.m. EDT (1800 GMT) on Monday, where he will discuss the toughest sanctions in history on Iran.

The move comes as peace talks between the US and Iran have hit a stalemate, capping oil shipments through the Strait of Hormuz, which accounts for a fifth of the world's supply. Brent crude futures fell $1.22, or 1.29%, to $93.17 by 0035 GMT, while U.S. West Texas Intermediate crude was at $85.86 a barrel, down $1.20, or 1.38%.

Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia, notes that it's unclear whether US policy to economically isolate Iran will be effective. However, if the measures work as intended, Iran's ability to respond via increased violence becomes a growing risk for energy markets to consider.