Oil Prices Steady Amid Harsher US Sanctions Against Iran
Oil prices steadied on Tuesday after falling more than 2% in the previous session. Investors were assessing the impact of harsher US secondary sanctions against Iran, which aims to cut off the country's economic lifeline.
US Treasury Secretary Scott Bessent unveiled an expansion of sanctions, telling countries they would need to sever their business ties or risk being cut out of the dollar-based financial system. However, he declined to identify the targeted countries or reveal when penalties would take effect.
Oil prices fell more than 2% on Monday, with US crude oil reaching a one-week low due to profit-taking after prices rallied over the previous two weeks. Analysts said markets are pricing economic pressure as a lower-risk path for physical supply than kinetic action, which is why initial reactions were for oil to move lower rather than spike higher.
However, Iran still retains the ability to respond by disrupting shipping, keeping a residual premium in the oil price.