West Texas Intermediate (WTI), futures on NYMEX, trade 3% lower at around $82.00 during the European trading session on Tuesday.
The Oil price faces intense selling pressure as market experts see warning of fresh United States (US) economic sanctions on Iran as less fearful for oil markets than increasing military operations
On Monday, US Treasury Secretary Scott Bessent said that the US is launching “an economic onslaught against Iran’s financial connections around the globe”. At a press conference, Bessent outlined plans to launch an ” economic D-Day” on Iran and stated the United States would pursue a “zero leakage” approach to enforcing its sanctions. US sanctions on Iran seen as warning shot with limited immediate market impact Analysts at Danske Bank observe that the US “economic D-Day” against Iran has so far been “a limited market mover,” noting that Treasury Secretary Scott Bessent largely confined himself to “a broad warning of secondary sanctions against entities still doing business with Iran, without providing concrete details on timing, monitoring or the scope of enforcement.” While the stated US objective is to further isolate Iran and “sever every economic lifeline,” Danske argues that the absence of specifics meant the move “felt more like a warning shot than a decisive escalation,” leaving the immediate macro and market reaction muted.
On the other side, Iran has “promised to retaliate against expanded US economic sanctions that the Americans said would cut off Iran’s economic lifeline,” with Tehran signalling confidence that key partners such as China will “resist Washington’s pressure campaign.” Strategists at SaxoBank have stated that the shift from “military conflict to economic pressure” in the US-Israeli war with Iran has reduced some of the oil market’s anxiety, Reuters reports. Meanwhile, a spokesperson from China’s Foreign Ministry, Lin Jian, has stated that its cooperation with Iran is conducted within the framework of international law…