Oil prices steadied during Tuesday's Asian session after falling yesterday, as investors assessed the potential impact of the latest United States sanctions on Iran and their implications for global crude supplies.
By 3:30 pm AEST (5:30 am GMT), Brent crude futures for November had eased 11 cents, or 0.1%, to US$90.43 a barrel, while US West Texas Intermediate (WTI) crude was down 5 cents, or 0.1%, at $84.96 a barrel.
Both contracts settled lower on Monday, with Brent falling 4.1% and WTI declining 2.4%.
ING commodities strategists commented in The Commodities Feed:
"The market seems largely unfazed by Washington’s push for tighter economic pressure on Iran, with traders treating the U.S. effort to nudge partners away from Iranian trade as marginal rather than market-moving.
"The U.S. announced more than 70 Iran-related sanctions and is threatening secondary sanctions on those that do not cut trading ties with Iran.
"However, China is the largest buyer of Iranian energy. It remains unclear whether the U.S. would risk a fragile trade truce with Beijing over secondary sanctions.
"The market is still awaiting further details on a possible timeline for trading partners to wind down ties with Iran."
U.S. Treasury Secretary Scott Bessent on Monday announced an expansion of sanctions aimed at cutting off Iran's economic lifeline and forcing an end to the war, warning countries they would need to sever business ties with Tehran or risk being excluded from the US dollar-based financial system.
However, Bessent declined to identify which countries could face penalties or specify when the measures would take effect, saying governments would be given time to comply with the new requirements.
Meanwhile, the United Kingdom Maritime Trade Operations (UKMTO) reported that an oil tanker was struck by an unidentified projectile on Tuesday and disabled about 9 nautical miles (16.7 km) northeast of Ash Shishah in Oman.
Iran continues to assert control over the strategically important Strait of Hormuz. On Monday, Tehran reportedly named 45 tankers it said had violated its rules for crossing the strait and threatened action against them, including confiscating their cargoes.
Meanwhile, the U.S. Department of Energy reported that crude oil inventories in the Strategic Petroleum Reserve fell by about 3.7 million barrels to 289.7 million barrels last week, their lowest level since November 1982.
