Oil Drops as Bessent Preps 'Toughest' Iran Sanctions
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- WTI crude dropped about 1.3% to $85.93 per barrel and Brent lost 1.24% to $93.22 a barrel Monday as investors awaited details of the new U.S. sanctions package against Iran.
- Treasury Secretary Scott Bessent was set to unveil the sanctions later Monday, framing the move on X as 'an economic D-Day — the single greatest financial offensive ever marshaled against an adversary.'
- Bessent told CNBC Washington intends to 'collapse' Iran with the 'toughest sanctions in history,' and is pressuring U.S. allies and other countries to cut economic ties with Tehran.
- President Trump last week threatened the 'most crushing economic operation ever taken against any country' and warned of steep penalties for nations that help Tehran evade sanctions, calling it 'Economic Warfare and Isolation on an unprecedented scale.'
- Iran's Islamic Revolutionary Guard Corps pushed back through state media, saying Tehran has ways 'to counter the adverse effects of the enemy's war' and can 'easily establish economic relations with countries.'
- Commonwealth Bank of Australia expects Brent to trade between $70 and $100 a barrel in H2 2026, noting that just 50% to 60% recovery of pre-war Strait of Hormuz oil flows could revive oversupply expectations and pull prices toward the bottom of that range.
Why it matters: Energy traders are now pricing a binary outcome on Bessent's sanctions: either Washington's push to economically isolate Iran succeeds and Brent could test CBA's $70 floor, or Iran reroutes trade and prices stay volatile near $93. Iran's defiant response, paired with Bessent's 'collapse' rhetoric and the Hormuz overhang, locks in sustained uncertainty for global oil markets.
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