US Sanctions on Iran Send Oil Prices Plummeting

Oil prices took a hit on August 24 as investors cashed out ahead of expected US sanctions against Iran, which could further disrupt oil supplies from the Middle East. Brent crude futures dropped by $1.23, or 1.3%, to $93.16 a barrel, while U.S. West Texas Intermediate crude declined by $1.36, or 1.6%, to $85.70.

The recent uptick in oil prices was largely driven by the stalled US-Iran peace talks and disruptions in oil shipments through the Strait of Hormuz, a key global energy route that handles about one-fifth of the world's oil supply.

Iran has allowed several Iraqi oil tankers to pass through the Strait of Hormuz after repeated requests from Baghdad, according to Iran's state news agency IRNA. However, analysts expect the recovery in Middle Eastern oil supplies to take longer than previously anticipated if the US-Iran conflict continues.