Oil prices fell during Asian trading on Monday as investors took profits ahead of an expected announcement from Washington on new sanctions against Iran that could further disrupt supplies from the Middle East.
By 2:55 pm AEST (4:55 am GMT), Brent crude futures for November delivery had fallen $1.33, or 1.4%, to $91.34 a barrel, while U.S. West Texas Intermediate (WTI) crude for October declined $1.42, or 1.6%, to $85.64 a barrel.
Both benchmarks posted a second consecutive weekly gain last week, with Brent rising 6.6% and WTI climbing 5.7% as peace talks between the U.S. and Iran reached a stalemate.
U.S. Treasury Secretary Scott Bessent, who is scheduled to hold a press conference later on Monday, has threatened to impose "the toughest sanctions in history" on Iran.
President Donald Trump has also threatened sanctions against Iran's trading partners.
ANZ analysts said in a note to clients:
"What is clear is that confidence in a near-term agreement to reopen the Strait of Hormuz remains low. Persian Gulf producers have found alternative routes to international markets.
"Saudi Arabia is exporting more crude via Red Sea terminals after the Houthis announced a blockade, while other producers are using smaller tankers in shuttle operations to bypass restrictions.
"Nevertheless, the prospect of Hormuz remaining under Iranian control suggests regional oil flows could remain be for an extended period."
