Oil Prices Fall as Markets Absorb New US Sanctions Push Against Iran

Oil prices declined on Monday as investors assessed the impact of the US plan to isolate Iran’s economy. The Iranian riyal hit a record low on the same day that Treasury Secretary Scott Bessent prepared to announce expanded secondary sanctions.

The administration has framed the measures as the most crushing financial operation yet against Tehran. Iran has responded by tightening control over the Strait of Hormuz and warning that support for the sanctions constitutes an act of war.

Roughly a fifth of the world’s seaborne oil normally passes through the Strait. The prolonged restriction, combined with the US naval blockade of Iranian ports, has already altered global energy flows. Markets are now weighing whether the new sanctions will force a change in Iranian policy or prolong the disruption.

China, which receives a significant share of its oil from the Gulf, has been urged by the US to cooperate. Beijing has responded that sanctions and pressure do not help resolve the problem and called for diplomacy.

The price movement reflects uncertainty over both the effectiveness of the economic campaign and the risk of further escalation in the six-month conflict.