Investing.com – Oil prices dipped on Tuesday, as investors appeared to take a measured approach to widening U.S. sanctions against Iran. Get more insights on oil and the U.S.-Iran war by subscribing to InvestingPro– now at 55% off
were lower by 1.9% at $90.38 a barrel by 04:53 ET (08:53 GMT), while dropped 2.0% to $83.25 a barrel.
Brent, as well as U.S. West Texas Intermediate crude, settled down more than 2% in the previous session. WTI, in particular, is now sitting around a one-week low, reportedly driven by profit-taking in the wake of a multi-week rally.
“Oil prices drifted lower yesterday despite renewed U.S. plans to tighten economic pressure on Iran,” analysts at ING said in a note to clients. “[T]raders [are] treating the U.S. effort to nudge partners away from Iranian trade as marginal rather than market‑moving.”
On Monday, the U.S. announced a host of new sanctions against 60 entities and individuals associated with Iran, while warning countries against maintaining economic ties with Tehran. But Washington has not yet imposed penalties, or specified when these would take effect.
The list of targeted entities also did not include any from China. The ING analysts flagged that it is unclear whether Washington would risk a fragile trade truce with China, the largest buyer of Iranian energy, over secondary sanctions.
“The market was unimpressed with Bessent’s announcement on an ’unprecedented’ campaign to isolate Iran from the global economy. He warned that any state doing business with Iran risks sanctions. However, there was no specific timeline on actions or plans,” ANZ analysts said in a note.
Iran signaled that it was ready to retaliate to the measures, having earlier threatened to further disrupt oil flows through the Middle East in response to U.S. aggression.
The new sanctions underline the Trump administration’s recent shift in strategy on Iran. Rather than escalating military attacks on the country, the White House has focused on applying increased economic pressure, arguing that it will eventually force Tehran back to the negotiating table.
For weeks, the U.S. and Iran have been at loggerheads, especially over reopening the Strait of Hormuz, a vital waterway for roughly a fifth of the world’s oil and liquefied natural gas prior to the outbreak of the war in late February. Shipping traffic through the Strait of Hormuz has slowed to a trickle, with Al Jazeera reporting that just one commodity vessel traversed the narrow waterway on Monday — the lowest daily volume since May 7.
Pakistan flags progress in Iran peace talks
However, Iran and Pakistan have discussed potentially restoring an interim ceasefire deal between Tehran and the U.S., according to a statement from Pakistan’s Interior Minister Mohsin Naqvi on Tuesday.
Naqvi suggested that “significant progress” has been made following a meeting with Iranian officials which “concluded on a highly positive note.”
“The Iranian President candidly shared his government’s perspective and we had a very constructive exchange on the issues involved,” Naqvi said in a social media post.
The U.S. and Iran previously signed a so-called Memorandum of Understanding in June aimed at providing negotiators a halt to hostilities and time to iron out a lasting peace agreement, but the framework arrangement effectively collapsed following attacks on tankers in the Strait of Hormuz.
(Ambar Warrick contributed reporting)