Crude oil prices rise as markets weigh US sanctions on Iran

Crude oil prices surged on Tuesday as investors assessed the ramifications of the United States imposing secondary sanctions on Iran. At 10:01 am, Brent oil futures reached $90.71, marking a 0.19% increase, while WTI (West Texas Intermediate) crude oil futures stood at $85.26, also up by 0.29%. September crude oil futures on MCX traded at ₹8167, a 0.39% rise from the previous close of ₹8135, with October futures at ₹8031, up by 0.50% compared to the prior value of ₹7991.

On Monday, US Treasury Secretary Scott Bessent announced the expansion of sanctions to sever Iran's economic ties. The Treasury Department added 60 individuals, entities, and vessels to the sanctioned list, though China's financial institutions involved in Iranian oil trade were notably absent. Bessent did not disclose the targeted countries or the exact timeline for the penalties to take effect.

Warren Patterson, ING Think's Head of Commodities Strategy, and Ewa Manthey, a Commodities Strategist, noted that the market remained largely indifferent to the US efforts to isolate Iran economically. They described the move as marginal rather than market-moving. The US had imposed over 70 Iran-related sanctions, threatening secondary sanctions on entities that continued trading with Iran.

China, the leading purchaser of Iranian energy, remained uncertain about the US willingness to jeopardize a delicate trade relationship with Beijing due to secondary sanctions. The market eagerly awaited further details about a possible timeline for trading partners to sever ties with Iran.