Oil prices steadied on Tuesday, after falling more than 2% in the previous session, as investors assessed the impact of harsher U.S. secondary sanctions against Iran.<\/p>\n
Angus Mordant | Reuters<\/p>\n
Oil\u00a0prices steadied on Tuesday, after falling more than 2% in the previous session, as investors assessed the impact of harsher U.S. secondary sanctions against Iran.<\/p>\n
Brent crude futures<\/a>\u00a0were down 9 cents, or 0.1%, at $92.16 by 0104 GMT, while U.S. West Texas Intermediate crude<\/a>\u00a0was up 1 cent at $85.02 a barrel.<\/p>\n Both contracts fell more than 2% on Monday with U.S. crude\u00a0oil\u00a0falling to a one-week low on profit taking after prices rallied over the previous two weeks.<\/p>\n U.S. Treasury Secretary Scott Bessent on Monday\u00a0unveiled\u00a0an expansion of sanctions to cut off Iran’s economic lifeline, to force an end to the war between them, telling countries they would need to sever their business ties or risk being cut out of the dollar-based financial system.<\/p>\n However, he declined to identify the countries that would be targeted or reveal when those penalties would take effect, saying he would instead provide them time to comply with the new directive.<\/p>\n While U.S. Defense Secretary Pete Hegseth\u00a0said\u00a0on Monday the U.S. would not rule out using military force against Iran, the country is turning towards more economic coercion, which analysts said removed concerns about threats to Middle Eastern\u00a0oil\u00a0supply because of the war.<\/p>\n “Markets appear to be pricing economic pressure as a lower-risk path for physical supply than kinetic action, which is why the initial reaction was for\u00a0oil\u00a0to move lower rather than spike higher,” said\u00a0Tim Waterer, chief market analyst at KCM.<\/p>\n However, he warned, “Iran still retains the ability to respond by disrupting shipping, which continues to keep a residual premium in the\u00a0oil\u00a0price.”<\/p>\n Highlighting those threats, an\u00a0oil\u00a0tanker was\u00a0struck\u00a0on Tuesday by an unidentified projectile and disabled about 9 nautical miles (16.7 km) northeast of Oman’s Ash Shishah, the United Kingdom Maritime Trade Operations said.<\/p>\n Iran is still maintaining it should have control over the key Strait of Hormuz, which before the war started in February typically carried cargoes equal to about 20% of\u00a0global\u00a0oil\u00a0use. On Monday, it named 45 tankers that had broken its rules on crossing the strait and threatened action against them, up to confiscating their cargoes.<\/p>\n The supply disruptions as a result of the U.S.-Israeli war on Iran that started on February 28 have caused countries to draw down their commercial and strategic reserves.<\/p>\n On Monday, the Department of Energy reported stocks of crude\u00a0oil\u00a0in the U.S. Strategic Petroleum Reserve\u00a0fell\u00a0by about 3.7 million barrels to 289.7 million barrels last week, the lowest since November 1982.<\/p>\n