Brent crude oil prices slipped to around $93 a barrel on Monday as investors took profits following a sharp weekly rally, while markets awaited details of a new round of tougher US sanctions on Iran that could further tighten global oil supplies.
Brent crude futures fell $1.22, or 1.29%, to $93.17 a barrel in early trading, while US West Texas Intermediate crude declined $1.20, or 1.38%, to $85.86 a barrel, according to Reuters. Both benchmarks had gained more than 5% last week as concerns over disruptions to Middle Eastern oil supplies intensified.
The pullback came as traders locked in gains ahead of an expected announcement by Washington on Monday outlining additional sanctions against Iran.
US Treasury Secretary Scott Bessent has described the planned measures as the “toughest sanctions in history”, signalling a major escalation in Washington’s campaign to isolate Tehran economically. The measures are expected to target Iran’s trading partners and could place further pressure on the country’s ability to export crude oil.
The sanctions come at a time when Iran’s oil exports are already facing significant disruption.
China, the largest buyer of Iranian crude, imported an estimated 534,000 barrels per day from Iran in August, down from about 823,000 barrels per day in July, according to Kpler data cited by Reuters. Iranian oil shipments have been affected by the US blockade of Iranian ships and ports, increasing uncertainty over how much crude Tehran can continue to place on the international market.
The prospect of further sanctions has therefore created a conflicting signal for oil markets. While tighter restrictions on Iranian exports could reduce global supply and push prices higher, investors have so far focused on profit-taking after last week’s rally.
Another major source of uncertainty is the Strait of Hormuz, through which a significant share of global oil supplies normally passes. Traffic through the strategic waterway remains well below normal levels amid continuing tensions between Iran and the United States.
Iran has rejected Washington’s pressure campaign and warned that continued economic pressure could trigger further retaliation. Iranian officials have also threatened measures affecting oil flows through the Gulf if the economic confrontation escalates.
The situation leaves the oil market highly sensitive to developments in both sanctions and shipping through Hormuz.
At about $93.19 a barrel on August 24, Brent is down 1.27% from the previous day but remains 5.47% higher over the past month and 35.45% above its level a year earlier, based on the cited CFD benchmark.
For oil-importing economies, the continued rise in Brent remains a key risk. Any further disruption to Iranian exports or a prolonged reduction in traffic through the Strait of Hormuz could tighten global supply and place renewed upward pressure on crude prices.
