Oil Prices Decline Ahead of Anticipated US Sanctions on Iran

Oil prices declined by over a dollar on Monday as investors moved to secure profits ahead of an anticipated U.S. announcement of new sanctions on Iran. Concerns are escalating that these sanctions could further disrupt Middle East oil supplies. Brent crude futures dropped $1.22 to $93.17 per barrel, and U.S. West Texas Intermediate (WTI) crude fell $1.20 to $85.86 per barrel by 00:35 GMT. This decline follows two consecutive weeks of over 5% weekly gains for both crudes last week, attributed to stalled peace talks between Washington and Tehran. This contributed to reduced oil shipments through the Strait of Hormuz, a critical waterway for about a fifth of global energy supplies. In a significant move, Iran granted permission for several Iraqi oil tankers to transit the Strait of Hormuz, responding to repeated requests from Baghdad. This provides a crucial outlet for continued Iraqi oil exports via the strait, amidst a sharp decline in maritime traffic. These developments unfold as the Strait of Hormuz sees significant reduction in shipping activity, with fewer than 20 cargo vessels crossing over the past weekend, showing 13 on Saturday and only four on Sunday, according to ship tracking data. U.S. Treasury Secretary Scott Bennett is set to announce new sanctions on Iran today, Monday, while President Donald Trump also threatened sanctions on Tehran's trading partners, increasing uncertainty about future oil supplies and tanker movements in the vital region.