- Bessent to announce more sanctions on Iran on Monday.
- Iranian president calls for diplomatic solution.
- Iran approves tankers carrying Iraqi oil to transit Hormuz.
Oil prices slipped more than $1 a barrel on Monday as investors took profits after recent gains and awaited details of expected new US sanctions on Iran, which could further disrupt supplies from the Middle East.
Brent crude futures were down $1.55, or 1.64%, to $92.84 at 0911 GMT, while US West Texas Intermediate crude was at $85.02 a barrel, down $2.04, or 2.34%.
Both contracts posted a second consecutive weekly gain last week, rising more than 5%, as peace negotiations between the US and Iran stalled, constraining oil shipments through the Strait of Hormuz, a route that once carried a fifth of global supplies.
“Oil slipped after a two-week rally as traders awaited the US plan to economically isolate Iran due later Monday,” said Saxo Bank analysts in a note.
US Treasury Secretary Scott Bessent, who is set to hold a press conference at 1pm EDT (1700 GMT) on Monday, has threatened to impose “the toughest sanctions in history” on Iran. President Donald Trump has also threatened to impose sanctions on Iran’s trading partners.
“Should the pledged embargo be launched, oil supply from the region will fall,” said PVM analyst Tamas Varga, adding that the US would likely tighten its naval blockade against Iranian oil exports and that Iran could retaliate with fresh strikes against oil installations in the Middle East.
Iran has condemned US plans to announce new sanctions, and President Masoud Pezeshkian has called for a diplomatic solution. Pakistan’s army chief was visiting Tehran on Monday for mediation talks, ahead of the US announcement.
Fewer than 20 commodity vessels transited the Strait of Hormuz at the weekend, shipping data showed on Monday, as Iranian and US blockades restrict traffic through the chokepoint for energy shipments.
Offers of Iranian crude to Chinese buyers have declined, and prices have jumped as the US blockade has cut Tehran’s shipments, according to trade sources.
However, Iran has granted permission for a number of Iraqi oil tankers to pass through the strait following repeated requests from Baghdad, Iran’s state news agency IRNA reported on Saturday.
Iraq’s SOMO and QatarEnergy both offered crude for loading inside the strait in tenders, trade sources told Reuters.
Brent has climbed back up to around $92 per barrel, from as low as $71 in June, due to inventory draws and a growing sense that Middle East disruptions can last longer, Morgan Stanley analysts said in a note.
The bank increased its Brent forecasts, projecting a peak at $100 in the fourth quarter.
