US Escalates Iran Sanctions, but Oil Prices Fall Anyway

The United States has escalated its economic war against Iran, but oil prices have unexpectedly fallen. The US Treasury Secretary announced new sanctions that would broaden the potential reach of secondary sanctions against countries and companies continuing to conduct business with Iran.

Nearly 60 individuals, entities, and vessels were included in Monday's measures. However, traders sold oil instead of buying it because they don't believe Washington's latest announcement will remove enough additional oil to justify another surge in crude prices.

The explanation provides an important lesson about the Iran war and Australia's fuel problem. Markets care less about the language surrounding sanctions than about how many barrels those sanctions actually remove.