Oil hits one-week low as investors shrug off US sanctions on Iran

Business Recorder reported that crude prices dropped more than 3 per cent on Tuesday, hitting a one-week trough as traders discounted the newest American sanctions drive targeting Iran. Brent futures slid $2.96, or 3.21 per cent, to $89.21 a barrel, while West Texas Intermediate lost $2.84, or 3.34 per cent, to $82.17. Both benchmarks sat at their lowest levels since August 17.

Treasury Secretary Scott Bessent announced the measures on Monday, nearly six months into a conflict Washington has yet to settle, but gave no list of targeted nations and no start date for penalties. Analysts said the move from military confrontation to economic pressure eased some fears about supply from the Middle East, even though the Strait of Hormuz is still largely shut. Saxo Bank's Ole Hansen said the sanctions were less forceful than some traders had anticipated.

Tim Waterer of KCM said Iran could still disrupt shipping, which keeps a residual premium in prices. A tanker was hit by an unidentified projectile off Oman, and only two tankers passed through Hormuz on Monday, the fewest since early May. A Russian refinery was damaged by a drone and suspended operations, while a fire broke out at a refinery in Kazakhstan.