Oil prices fell further on Tuesday as traders judged fresh U.S. sanctions on Iran less disruptive to supply than continued Middle East tension. Brent and WTI crude both dropped more than 2%, with WTI touching a one-week low, while Iran signaled it was ready to retaliate.
Brent and WTI extend losses
Brent crude oil fell 2.6% to $89.72 a barrel in midmorning European trade. WTI futures slid 2.7% to $82.67 a barrel over the same stretch. WTI is now sitting around a one-week low, reportedly driven by profit-taking after a multi-week rally.
Sanctions target dozens of entities, spare China
Treasury Secretary Scott Bessent said the U.S. was sanctioning more than 60 entities, individuals and vessels tied to the Iranian regime, without outlining specific steps against countries like China. The list of targeted entities did not include any from China, the largest buyer of Iranian energy. According to WSJ, analysts at ING said traders are "treating the U.S. effort to nudge partners away from Iranian trade as marginal".
Iran signals retaliation as Hormuz traffic thins
Iran signaled it was ready to retaliate against the measures. Shipping through the Strait of Hormuz has slowed to a trickle, with Al Jazeera reporting that just one commodity vessel traversed the waterway on Monday, the lowest daily volume since May 7.
Even so, Pakistan's Interior Minister Mohsin Naqvi said significant progress had been made in talks between Iran and the U.S., describing a meeting with Iranian officials as ending on a positive note.
Sources: The Wall Street Journal, Commodities & Futures News
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