Global oil prices fell to a one-week low on Tuesday as traders assessed the latest US sanctions against Iran and concluded that the measures posed less immediate risk to oil supplies than a potential military escalation.
Brent crude futures declined 35 cents, or 0.38%, to $91.82 per barrel by 0810 GMT. Meanwhile, US West Texas Intermediate (WTI) crude fell 41 cents, or 0.48%, to $84.60 per barrel.
Brent touched its lowest level since August 19, while WTI reached its weakest level since August 17.
According to Saxo Bank’s head of commodity strategy Ole Hansen, market concerns over a wider military conflict eased after the latest US sanctions announcement appeared less aggressive than traders had anticipated.
The Trump administration announced expanded sanctions against Iran and warned countries to reduce business ties with Tehran.
Iran, meanwhile, vowed to retaliate and said major trading partners would resist Washington’s pressure.
However, the US Treasury stopped short of imposing immediate penalties. Treasury Secretary Scott Bessent did not identify countries that could face sanctions or provide a specific timeline, saying affected countries would be given time to comply.
US Defense Secretary Pete Hegseth also said Washington had not ruled out military action against Iran, although the administration has increasingly focused on economic pressure.
Despite the decline in oil prices, analysts warned that Iran could still disrupt regional shipping, keeping a risk premium in crude markets.
KCM chief market analyst Tim Waterer said the potential for disruptions remained an important factor supporting oil prices.
Shipping activity in the region has also come under pressure. The United Kingdom Maritime Trade Operations reported that an unidentified projectile struck and disabled an oil tanker near Oman on Tuesday.
Only two tankers passed through the Strait of Hormuz on Monday, according to shipping data, marking the lowest daily number of commodity vessels since early May.
The Strait of Hormuz is a critical global energy route, with around one-fifth of global oil consumption typically passing through the strategic waterway.
The ongoing US-Israeli conflict with Iran has increased concerns about potential disruptions to global oil supplies.
Several countries have responded by drawing down commercial and strategic oil reserves to manage potential supply risks.
Meanwhile, a Ukrainian drone attack damaged the Novoshakhtinsk oil refinery in Russia’s southern Rostov region. The facility suspended operations following the overnight attack, according to the regional governor.
For now, oil markets remain focused on developments around Iran, regional shipping activity, and the possibility of further disruptions to global crude supplies.
