International oil prices declined on Monday. Investors are waiting for full details of Washington’s so‑called “toughest‑ever” sanctions against Iran, while Tehran downplayed threats of intensified external economic pressure.
U.S. West Texas Intermediate (WTI) crude futures fell roughly 1.3% to settle at $85.93 per barrel. Global benchmark Brent crude dropped 1.24% to $93.22 per barrel. Markets remained cautious ahead of the sanctions roll‑out, as energy traders assessed whether the new policies would alter expectations for Middle Eastern crude supply.
U.S. To Unveil New Sanctions Package
U.S. Treasury Secretary Scott Bessent is expected to release a new set of sanctions targeting Iran later on Monday. On social platform X, Bessent wrote: “At dawn, an economic ‘D‑Day’ against Iran is coming — the largest‑scale financial offensive ever launched against a hostile power.”
In a CNBC interview last week, Bessent stated Washington intended to “destroy” the Islamic Republic of Iran with “the toughest sanctions in history”, and push U.S. allies and other nations to sever economic ties with Tehran. The remarks mark an escalation of pressure on Iran under the Trump administration.
Trump Ramps Up Pressure
U.S. President Donald Trump warned last week that he would impose “the most devastating economic action ever taken against any country” on Iran. He cautioned that any nation helping Tehran evade sanctions would face severe financial penalties, describing the campaign as “economic warfare and isolation on an unprecedented scale”.
Iran quickly pushed back. According to Iranian state‑run media, the Islamic Revolutionary Guard Corps stated Tehran has the means to “counter the adverse impacts of enemy warfare” and can “eASIly build economic ties with other countries”. The tough rhetoric from both sides keeps markets highly alert to further geopolitical developments.
Oil Market Focuses on Strait of Hormuz
The Commonwealth Bank of Australia expects oil prices will stay volatile in the second half of this year. Markets need to judge whether Washington’s policies to economically isolate Iran will succeed, and what counter‑measures Tehran may take in response.
In a Monday report, the bank wrote it remains unclear whether U.S. economic isolation measures will prove effective. Should the policies work as intended, Iran’s capacity to retaliate through heightened violence will become an increASIngly critical risk for energy markets.
Commonwealth Bank of Australia also forecasts Brent crude will trade within a $70‑$100 per‑barrel range for the second half of 2026. It notes that even a moderate recovery of crude flows through the Strait of Hormuz could push oil prices toward the lower bound of this range. Its estimates show restoring flows to 50‑60% of pre‑conflict levels would be enough to reignite expectations of global supply surplus.
With full sanctions details yet to be published, oil prices face near‑term pressure. Subsequent price action will hinge on enforcement of U.S. policy, Iran’s response, and whether crude shipments along critical Middle Eastern waterways suffer further disruptions.