Global oil prices steadied on Tuesday after sliding more than 2 percent in the previous session, as traders weighed the likely impact of tougher US sanctions on Iran and growing tensions in the Middle East.
Brent crude slipped 9 cents to $92.16 a barrel by 0104 GMT, while US West Texas Intermediate edged up 1 cent to $85.02. Both benchmark contracts had dropped sharply on Monday as investors booked profits following a strong rally over the past two weeks.
The latest market focus is on Washington’s decision to tighten economic pressure on Iran. US Treasury Secretary Scott Bessent announced an expansion of secondary sanctions aimed at cutting off Tehran’s financial lifeline. He warned that countries doing business with Iran could lose access to the US dollar based financial system if they fail to comply. However, he stopped short of naming the countries involved or giving a timeline for the new measures.
Although US Defence Secretary Pete Hegseth said military action against Iran remains an option, analysts believe the stronger emphasis on sanctions has eased immediate fears of a disruption to regional oil supplies.
Tim Waterer, chief market analyst at KCM, said investors viewed economic measures as less likely to interrupt physical oil flows than direct military action, which helped explain why prices fell instead of rising.
He cautioned, however, that risks remain because Iran could still respond by targeting shipping routes, keeping a degree of uncertainty in the market.
Those concerns were reinforced after the United Kingdom Maritime Trade Operations reported that an oil tanker was struck by an unidentified projectile near Oman’s Ash Shishah on Tuesday, leaving the vessel disabled.
Iran has also continued to assert control over the Strait of Hormuz, a vital shipping route that normally carries about one fifth of global oil consumption. This week, Tehran identified 45 tankers it said had breached its rules for crossing the waterway and warned they could face action, including the seizure of their cargoes.
Meanwhile, the US Department of Energy said crude oil held in the country’s Strategic Petroleum Reserve fell by 3.7 million barrels last week to 289.7 million barrels, the lowest level since November 1982.
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