Brent crude fell to about $92 a barrel on Monday after the US Treasury unveiled a sweeping new sanctions campaign against Iran, deepening a six-month-old war centred on the Strait of Hormuz.
Treasury Secretary Scott Bessent announced the measures, dubbed Operation Economic Outcast, at a press conference in Washington, describing them as the broadest coordinated economic isolation campaign ever aimed at a single country. The sanctions expand secondary restrictions on foreign entities and countries doing business with Tehran and add new targets across five sectors: digital assets, technology, gold, aviation and shipping. “We will sever every economic lifeline that sustains Iran,” Bessent said.
Brent crude, the international benchmark, slid to $92.06 a barrel following the announcement, down 2.5% on the day, while US West Texas Intermediate (WTI) crude fell a similar margin to $84.89. Prices had already retreated earlier Monday as traders locked in gains after both benchmarks rose more than 5% last week on fears that Middle East supply disruptions would deepen.
The new sanctions build on a naval blockade the US imposed on Iranian shipping in April and on air and ground strikes that began in late February, when Washington and Israel launched joint attacks on Iranian military, government and infrastructure sites. Ceasefire talks broke down after both sides missed a 60-day negotiating window, and fighting has since concentrated on the Strait of Hormuz, the narrow waterway through which about a fifth of the world’s oil normally passes. Traffic through the strait remains well below pre-war levels, though the US military has said it has escorted tankers carrying more than 660 million barrels of crude through the passage since May.
Iran’s oil exports have already been squeezed. China, the largest buyer of Iranian crude, imported an estimated 534,000 barrels a day in August, down from about 823,000 barrels a day in July, according to Kpler data cited by Reuters. Iran’s currency dropped to a record low of more than 2 million rials to the US dollar on the open market on Monday.
Tehran has rejected the pressure campaign. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said any country that joins the new sanctions would be treated as an enemy, and Iranian authorities have separately warned that vessels violating the country’s rules for transiting Hormuz could face fines, detention or seizure. Iran’s Foreign Ministry called the threat of expanded sanctions “desperate” but warned of a harsh response if Washington follows through.
Analysts expect the market to stay volatile as both the sanctions and Hormuz traffic evolve. Commonwealth Bank of Australia has forecast Brent trading between $70 and $100 a barrel through the second half of 2026, with prices likely to fall toward the lower end only if shipping through the strait recovers to at least half its pre-war volume.
