US Sanctions Threaten to Disrupt Iranian Oil Flows Amid Global Price Volatility

Oil prices dropped on Monday as investors locked in profits following last week's rally. The Brent crude futures fell $1.22, or 1.29 percent, to $93.17 a barrel, while US West Texas Intermediate crude was down $1.20, or 1.38 percent, at $85.86 a barrel.

The decline came as markets awaited an expected US announcement of tougher sanctions on Iran that could further disrupt crude supplies from the Middle East. US Treasury Secretary Scott Bessent is due to hold a news conference at 2 pm EDT (1800 GMT) on Monday, where he has warned that Washington could impose 'the toughest sanctions in history' on Iran.

Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia, said it's unclear whether US policy to economically isolate Iran will prove effective. If the US measures do work as intended, Iran's ability to respond via increased violence becomes a growing risk for energy markets to consider, he added.