Treasury Secretary Bessent frames Iran sanctions as a warning shot, easing market fears of broader restrictions and pressuring oil prices.
Brent crude fell to around $93 and WTI to $85, extending Monday’s pullback as investors digested a softer US stance on Iran sanctions. Treasury Secretary Bessent described the measures as a deliberate “warning shot,” signaling Washington held back full secondary sanctions initially promised.
The retreat follows a rally driven by expectations of stricter curbs on Iranian oil exports. Meanwhile, Iran’s threats to halt Hormuz shipments and parliamentary moves to charge transiting vessels provide a geopolitical floor under prices. Treasury yields also reversed recent gains, undermining the narrative that falling rates were driving dollar weakness.
Markets now await Friday’s Jackson Hole speech by former Fed governor Warsh, seen as the next major catalyst for equities and rates. Chip sector weakness and mixed signals on yields leave risk assets in a holding pattern.