US-Iran war: Oil prices fell more than 1% on Monday as investors booked profits ahead of an anticipated announcement from Washington on additional sanctions against Iran, which could further disrupt crude supplies from the Middle East.
Brent crude futures declined $1.22, or 1.29%, to $93.17 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude dropped $1.20, or 1.38%, to $85.86 per barrel.
Both benchmarks had recorded their second consecutive weekly gains last week, rising over 5%, after peace talks between the US and Iran reached a deadlock. The impasse has limited oil shipments through the Strait of Hormuz, a key route that previously carried around one-fifth of the world's oil supply.
What's weighing on crude oil prices?
US Treasury Secretary Scott Bessent, who is scheduled to address a press conference at 2 p.m. EDT on Monday, has warned that Iran could face what he described as “the toughest sanctions in history.” President Donald Trump has also threatened sanctions against countries that continue to trade with Tehran.
“We now expect Brent prices to average at USD86/b during the quarter from our previous estimate of USD85/b. Meanwhile, we raise our Q3FY27 estimate from USD72/b to USD75/b. The increase is attributed continued disruption to production in Middle, aggressive return of Chinese demand in oil markets, broader absorption of 400 million barrels of IEA release and US inventory at bare operational levels. As a results of the above, we increase our FY27 Brent estimate from USD82/b to USD84/b,” the firm said in the report.
(With inputs from Reuters)
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