New US sanctions targeting Iran may extend to Russia and China, escalating geopolitical risks and tightening oil market dynamics.
West Texas Intermediate crude trades at $85.35, paring recent gains as investors await details of a sweeping US sanctions package against Iran. The measures, described as the “single greatest offensive ever” against an adversary, could expand to include Russia and China, according to US Treasury Secretary Scot Bessent.
Iran has vowed to maintain trade ties with China and Turkey, threatening to block Gulf oil exports if sanctions proceed. Analysts at Commerzbank warn that tightening diesel inventories and geopolitical tensions could limit price dips, with further drawdowns potentially pushing product prices higher.
The sanctions announcement, expected later Monday, raises risks of retaliatory actions, including attacks on US allies in the Gulf and Europe. Markets remain on alert amid shrinking crude inventories and no major data releases scheduled.