Oil prices steady as investors weigh impact of expanded US sanctions against Iran

Oil prices steadied on Tuesday as investors weighed the impact of expanded US secondary sanctions against Iran. Brent crude futures dropped 9 cents, or 0.1 percent, to US$92.16, while US West Texas Intermediate crude was up 1 cent at US$85.02 a barrel. Both contracts had fallen more than 2 percent on Monday, reaching a one-week low on profit-taking following a rally over the previous two weeks.

US Treasury Secretary Scott Bessent introduced the expanded sanctions on Monday, aiming to sever Iran's economic lifeline to end the war. However, he did not specify which countries would be targeted or the timeline for the penalties. US Defense Secretary Pete Hegseth stated that the US would not rule out military force against Iran, but analysts believe economic pressure is being seen as a lower-risk path for oil supply than military action.

An oil tanker was attacked by an unidentified projectile on Tuesday, about 16.7km northeast of Oman's Ash Shishah, according to the UK Maritime Trade Operations. Iran maintains control over the Strait of Hormuz, which typically carries cargoes equal to 20% of global oil use. The attacks have led countries to draw down their commercial and strategic reserves, with the US Strategic Petroleum Reserve's crude oil stocks falling to their lowest level since November 1982.