KEY POINTS
- Brent fell 1.0 percent to $91.27 and WTI 0.9 percent to $84.25 as Iran sanctions failed to lift prices.
- Analysts saw US economic pressure as lower-risk for oil supply than military action, though Iran could still disrupt shipping.
- A tanker was disabled off Oman, and US Strategic Petroleum Reserve stocks fell to their lowest since 1982.
Oil prices fell again on Tuesday, extending a slide of more than 2 percent from the previous session, as investors shrugged off the latest US sanctions on Iran.
Brent crude dropped 90 cents, or 1.0 percent, to $91.27 a barrel by 0630 GMT, while US West Texas Intermediate fell 76 cents, or 0.9 percent, to $84.25. Both contracts had settled lower on Monday, with US crude touching a one-week low on profit-taking after a two-week rally.
Sanctions seen as low-risk for supply
According to ING strategists, the market looked largely unfazed, since traders treated Washington’s push to steer partners away from Iranian trade as marginal rather than market-moving. Moreover, US Treasury Secretary Scott Bessent unveiled a sanctions expansion on Monday and told countries to cut business ties with Iran or risk losing access to the dollar system, yet he named no targets and set no timeline.
Consequently, analysts read the shift as a lower-risk path than military action. KCM’s Tim Waterer said markets priced economic pressure as less threatening to physical supply, which is why oil first moved down rather than up. Still, he warned that Iran can still disrupt shipping, keeping a residual premium in the price.
Shipping risk and tight reserves linger
Those threats stayed visible. An unidentified projectile hit an oil tanker on Tuesday and disabled it about nine nautical miles off Oman, the UK Maritime Trade Operations said. Furthermore, Iran again insisted it should control the Strait of Hormuz, which carried about a fifth of global oil use before the war, and it named 45 tankers that broke its crossing rules while threatening to seize their cargoes.
However, the war’s disruptions keep draining reserves. On Monday, the US Energy Department said crude in the Strategic Petroleum Reserve fell about 3.7 million barrels to 289.7 million last week, its lowest since November 1982. Therefore, traders are weighing softer near-term risk against a tightening supply cushion.
