SINGAPORE / RankWire.AI / – Oil prices experienced a slight uptick on Tuesday after both Brent crude and WTI declined by over 2% in the previous trading session. By 0330 GMT, Brent futures had increased by 27 cents, or 0.3%, reaching $92.44 per barrel. Meanwhile, U.S. West Texas Intermediate gained 37 cents, or 0.4%, settling at $85.38. This rebound followed Monday’s significant decline, which marked the end of six straight sessions of gains across the two major crude benchmarks.
Brent crude closed down $2.22 on Monday at $92.17 per barrel, representing a decrease of 2.35%. WTI also fell by $2.05, the same percentage, closing at $85.01 per barrel. The U.S. benchmark touched a one-week low during trading. The losses came after two weeks of gains and coincided with traders digesting new U.S. economic sanctions targeting Iran and companies maintaining business relations with the country.
Despite the declines, Brent stayed above the $90 mark per barrel, with geopolitical tensions and supply concerns continuing to influence global energy markets. Since the start of the U.S.-Israeli conflict with Iran on February 28, oil supplies have been disrupted. Shipping through the Strait of Hormuz has also experienced restrictions amid the conflict. Before the escalation, approximately 20% of global oil consumption was transported via the strait.
Expansion of U.S. sanctions targeting Iran-related sectors
On Monday, the U.S. Department of the Treasury announced the initiation of Operation Economic Outcast, broadening sanctions on Iran-related commerce. These measures encompass digital assets, technology, gold, aviation, and shipping sectors. Nearly 60 entities, individuals, and vessels across various jurisdictions have been sanctioned. The actions targeted networks involved in Iranian oil transportation and revenue, as well as groups associated with nuclear procurement, missile technology, and cyber activities.
The new sanctions framework empowers U.S. authorities to pursue foreign individuals engaged in or supporting the five newly designated Iranian economic sectors. According to Treasury, countries will be given specific timelines to address Iran-related activities identified by U.S. officials. These measures add to existing restrictions on Iran’s petroleum and petrochemical industries. The market decline observed on Monday followed this announcement after six consecutive days of gains for Brent and WTI.
Hormuz Strait incident and diminishing U.S. reserves influence market dynamics
Maritime security concerns also played a role in shaping physical oil flows on Tuesday. The United Kingdom Maritime Trade Operations reported an unidentified projectile that struck and disabled an oil tanker near Oman, approximately 9 nautical miles, or 16.7 kilometers, northeast of Ash Shishah. Additionally, Iran identified 45 tankers on Monday that it claimed had violated its regulations for crossing the Strait of Hormuz, warning of potential actions against those vessels.
U.S. emergency oil inventories have continued to dwindle amid ongoing supply disruptions. The Department of Energy reported a reduction of about 3.7 million barrels in crude stockpiles last week, bringing the Strategic Petroleum Reserve down to 289.7 million barrels — its lowest level since November 1982. Against this backdrop, Brent was trading at $92.44 early Tuesday, while WTI stood at $85.38 after both benchmarks recovered part of Monday’s decline.